There was even a war of words between Indian and Pakistan intelligence agencies over the reported death of the Harkat-ul-Jihadi terrorist.
Intelligence Bureau sources now say Bilal was gunned down in Karachi, Pakistan, on August 30, 2007, along with his brother Samad.
The IB sources were unable to identify the individuals or agencies responsible for the killings.
They say their information is based on a photograph they received of Bilal lying dead with bullets holes in his head. Samad's body lies alongside him, they add.
Bilal's 70-year-old father Mohammad Abdul Wahid, a resident of Hyderabad, says he knows his sons are dead, adding that the photograph of the slain Bilal and Samad was shown to him.
The Hyderabad police do not, however, confirm this information. City Police Commissioner B Prasad Rao says he cannot verify Bilal's demise.
While residents of Moosrambagh in Hyderabad, where Bilal's home is located, maintain he is dead, his other brother Majid Bilal thinks otherwise.
Majid was arrested by the Hyderabad police in connection with last year's twin blasts in the city. During his recent narco analysis test, he claimed that Bilal was alive. Majid posted the photograph of Bilal's body on the Internet in the belief that by doing so, the police pressure on him would decrease. During his narco-test he said Bilal is based in Lucknow and shuttles between Pakistan and Bangladesh.
During his narco-analysis and interrogation, Mohammad Ghouse, who was arrested in Karnataka for allegedly planning terror strikes in the state, claimed that Bilal met him in Hubli after August 2007, the month he was supposedly killed in Karachi.
Ghouse said Bilal met him along with 16 others near the Hubli bus stand. During the meeting, they discussed various terror strikes. Bilal, Ghouse claims, also shared his expertise on bomb-making with the group.
Pakistani intelligence agencies claimed that Bilal was dead in October 2007. However, the Intelligence Bureau denied this report, claiming it was a Pakistani red herring, meant to distract Indian law enforcement agencies.
The IB stuck to this position for a period of time, but gradually changed its stand.
A retired IB officer, who did not want to be identified for this report, asks if the news of Bilal's death is true, why have Indian agencies not made any effort to retrieve his body. A photograph cannot be the basis to confirm the death, he felt.
Both the IB and police departments would stand to gain from Bilal's death, he added. Since Bilal has been named the mastermind in several terror attacks, the former IB officer says half the job of cracking those case is done.
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