However, another senior cop and accused Pradeep Suryawanshi who was leading the encounter team was convicted for murder. Twenty others, including 13 policemen, were also convicted for various charges by Sessions Judge V D Jadhwar.
The sentence is likely to be pronounced on Monday.
As per prosecution, on November 11, 2006, a police team had picked up Ram Narayan Gupta alias Lakkhan Bhaiya from Vashi in neighbouring Navi Mumbai on suspicion that he was a member of the Chotta Rajan gang, along with Anil Bheda.
It was also alleged that Bheda was initally detained at D N Nagar police station in Versova and was later shifted to Kolhapur. He was subsequently brought back to Mumbai and was detained for about a month.
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On November 15 the same year, Lakhan Bhaiyya's brother advocate Ramprasad Gupta move the Bombay High Court alleging that the encounter was "fake" and it a was a case of "brutal murder".
Two years on in February 2008, the High Court ordered a magisterial enquiry into the fake encounter. While the magistrate in a report concluded that the killing was a "cold-blooded" murder, the Bombay HC in September 2009 constituted a Special Investigation Team (SIT) and directed them to probe the case.