The development comes despite Foreign Minister, SM Krishna writing a letter to his counterpart in Denmark from Dhaka where he is on a visit currently. Sources reveal that Krishna expressed his distress and said that India will continue to be firm on Davy's extradition.
Denmark's justice ministry had earlier agreed on Davy's extradition but only after the approval from Danish Courts.
The Danish High Court had earlier favoured Kim Davy on Jun 30 after it rejected his extradition plea. The decision was taken by the Constitutional Bench, Denmark.
The CBI was supposed to appeal to the Danish High Court in three weeks time.
Meanwhile, there are reports of India trying to make fresh diplomatic move with Denmark after it decided to abandon the Kim Davy case.
"...both the District court and the high court agreed for example, that the evidentiary basis for extradition is sufficient, that the double criminality requirement of the Extradition Act is satisfied and that the case is not time barred," said Jorgen Steen Sorensen, Denmark's Director of Prosecution, in a statement.
On Dec 17, 1995 arms and ammunition were dropped into Purulia District of West Bengal. Davy was accused of being the main conspirator behind dropping 10 rocket launchers, 100 anti tank grenades and at least 300 Bulgarian made AK 47 rifles from an aircraft.
Though Davy was arrested by the CBI, he managed to escape from the Mumbai airport after five days. A request to extradite Davy to the country was sent by CBI in 2002, in which later the Danish authorities put up conditions to extradite the accused Davy in 2005.
Five citizens of Latvia and a British national, Peter Bleach were given life imprisonment sentence. The Latvians were released in 2000, while Bleach was released after a Presidential pardon in 2004.