'Dishoom' came out top in a list of 100 eateries across the country in an online review-cum-voting analysis by online urban city guide Yelp.
It knocked former winner Regency Cafe to second place and Dinner by Heston Blumenthal to third.
Dishoom founders Shamil and Kavi Thakrar said: "We couldn't be more delighted to hear this news. We feel privileged just to be able to serve the guests who come through our doors for breakfast, lunch, or dinner, and perhaps share a little bit of our love for Bombay food and culture with them".
The restaurant's Covent Garden branch in central London knocked off last year's winner Regency Cafe to second place, followed by Michelin-starred Dinner By Heston Blumenthall, which came in third.
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Set up by Zoroastrian immigrants from Iran, there were almost 400 Irani cafes in Bombay at their peak in the 1960s.
However, today less than 30 survive.
Dishoom was set up in 2010 to re-create their lost glory with a decor of stained mirrors and sepia family portraits and a menu including Bombay Omelette, Bun Maska and Keema Pau.
A vast majority of restaurants in the top 100 are from London, followed by Scottish cities of Edinburgh and Glasgow.