The UK's Crown Prosecution Service (CPS) has confirmed that the CBI has not appealed against the High Court verdict.
"With the UK High Court Judgement becoming final, the extradition case against the Appellant (Shankaran) stands fully dismissed and hence closed," Shankaran's defence team said in a statement here.
"The Appellant however reserves the right to pursue further remedies under international and Indian law," it said.
47-year-old Shankaran was accused by the CBI of allegedly leaking classified Naval information running into over 7,000 pages from the Naval War Room and Air Defence Headquarters to arms dealers and a case was registered against him in March 2006.
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An extradition request was sent to the UK in 2007 following reports that he was in the country and he was arrested by UK authorities in April 2010 on the basis of the non-bailable arrest warrants issued by the Court of Chief Metropolitan Magistrate, New Delhi.
"The 14-day deadline for an appeal has now passed and as previously stated, the CPS had advised the Indian authorities that an appeal against the High Court's decision is not possible," a CPS spokesperson said here.
"The defence's costs will be awarded from central funds in the UK," he added.
Defendants acquitted in England and Wales who had privately funded their case can apply for their legal costs to be reimbursed from central funds, which is UK taxpayer funded.