He was 60.
Ajay died at the Breach Candy Hospital yesterday afternoon due to cardio-respiratory failure, according to the hospital and family sources.
He was first admitted to the Cumballa Hill Hospital on July 30 with urinary tract and lung infections, but soon he developed sepsis, following which he was shifted to the Breach Candy hospital.
He was one of the most famous and earliest sex change cases in the country. In November 2003, he underwent a surgery at the age of 46.
Ajay's funeral was held at the Banganga cremation grounds last evening in the presence of family members and close friends. His mother Madhuri Mafatlal, whom he was very close to, was cremated at the same place two years back.
Ajay always maintained that he wanted to live like man as he never felt like a woman.
He and his mother Madhuri were embroiled in a bitter property battle with his younger brother Atulya and the latter's estranged wife Sheetal.
After the death of the patriarch Yogindra Mafatlal over a decade ago, an intense family feud started between Ajay and Atulya over the 10,000-sqft family mansion on Altamount Road here, with Atulya and Sheetal on one side and Madhuri and Ajay on the other side.
To put an end to the dispute, their mother allowed partition of the Altamount Road mansion.
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