Dossa, 60, died at Mumbai's J J Hospital where he was admitted in the early hours today after complaining of chest pain, a police official said.
He was earlier this month convicted by a special TADA court here in the serial blasts case.
He had smuggled firearms, ammunition, detonators, hand grenades and highly explosive substances like RDX into India for the co-ordinated blasts that rocked Mumbai on March 12, 1993, claiming 257 lives and injuring over 700 people.
He complained of chest pain and had uncontrolled hypertension, diabetes and infection, Lahane said.
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Dossa died at 2.30 pm due to cardiac arrest, he said.
The CBI had sought capital punishment for Dossa, arguing that his role in the serial blasts was "more severe" than that of hanged convict Yakub Memon.
According to the central probing agency, Dossa was one of the "brains" behind the conspiracy and his degree of responsibility towards the commission of the crime was the highest.
Special Judge G A Sanap's had then observed that Dossa "actively, wilfully, deliberately and consciously" participated in the meeting (held at residence of his elder brother Mohammed Dossa in Dubai) "which gave birth to the original design of the heinous criminal conspiracy to take revenge against the Government and the Hindus" for demolition of Babri Masjid.
The Dossa brothers made travel arrangements for co-accused Feroz Khan and others to travel to Dubai and their stay. At the behest of (absconding accused) Dawood Ibrahim, Mustafa made arrangement for co-accused's travel to Pakistan for terror training, the court noted.
Dossa also gave some of the AK-56 rifles, which landed at Dighi, to (absconding conspirator) Tiger Memon. These weapons were used to impart training to several co-accused. The plan was to use these rifles to open fire at Mumbai civic body's (BMC) headquarters and other places to kill political leaders and senior police officials, the court said.
The court had acquitted Abdul Quayyum of all charges.