Khan allegedly supplied the Lashkar-e-Taiba (LeT), which was planning an attack, with information on the city of Mumbai.
On the night of January 30, 2011, Khan, accompanied by her mother Shelina, older sister Hashmina, twin siblings Imran and Zara, and cousin Rehshma, drove out of Mumbai towards their holiday home in Igatpuri, 126 km north of Mumbai. On February 9, 2011, Khans's mother spoke with her sister, Albana Patel, and said that Khan was in Chandigarh with her third husband Pervez Iqbal Tak. After this, the family vanished without a trace.
Subsequently, Khans’s father, Nadir Shah Patel (Shelina's first husband), filed a complaint at a Mumbai police station stating that his daughter had gone missing along with other members of her family. A similar complaint was also filed by Bollywood film director Rakesh Sawant, who was shooting his second film Jinnat with Khan just before she disappeared from Mumbai. Nadir Shah Patel has appealed to the Bombay High Court on 17 July 2012 seeking transfer of her daughter's murder case from Crime Branch to CBI, alleging that the former did not probe the case promptly.
Khan's step-fathers, Parvez Iqbal Tak, a suspected Lashkar-e-Taiba member, and Asif Sheikh (Shelina's second husband), were suspected of being behind Khan and her family's disappearance. Police also questioned Nadir Shah Patel during the investigation.
Parvez Iqbal Tak was arrested by the Jammu and Kashmir Police in connection with another case on June 21, 2012. During interrogation Tak admitted that Khan and some members of her family were shot dead in Maharashtra in February 2011. The next day Tak retracted his story, claiming instead that Khan and her family were still alive. The Crime Branch of Mumbai Police investigating the kidnapping case brought Tak to Mumbai, where he was produced before Esplanade Court, Southern Mumbai on 10 July 2012. The Court sent Tak to Police custody till July 19. Confessing before the Crime Branch, Tak changed his statement for a third time, claiming instead, that he intended to kill Khan's mother Shelina for continuously humiliating him, and for having relationship with other men. Tak told interrogators that he, along with his associates killed Khan and her five family members and buried their bodies behind her Igatpuri bungalow. He allegedly killed all of them as Khan had witnessed her mother's murder. Owing to Tak's continuously changing statements, the Mumbai Police was reluctant to place full reliance on his testimony. Tak was taken to Igatpuri to corroborate the claims he made during his interrogation.
Asif Sheikh was arrested from Bangalore. Sheikh confessed that he and Tak shot and killed Khan and her family. Asif Sheikh's name was revealed as one of the co-conspirators by Parvez Tak in his earlier confession before the Jammu and Kashmir Police.
While examining Khan's Igatpuri bungalow, the Police investigation team found six skeletons, believed to be those of Khan and her family members. Himanshu Roy, Joint Commissioner of Police (Crime), Mumbai, said that the bodies had been found carefully buried in a pit. Detailing the find, Roy said three bodies were placed at the bottom of a 12 feet by 8 feet pit, which was about 6 feet deep. The pit, covered first with mattresses and pillows and then with stone; then, three more bodies were placed and similarly covered and finally, the pit was covered with mud. The stones were used to keep wild animals away. There was very little clothing left on the skeletal remains, but it was evident that the victims were murdered and buried with even jewellery on the bodies. There is one male body, presumably say the police, that of Khans's brother Imran and five female bodies. The bodies will be matched against DNA samples from Khan's biological father, Nadir Patel. The identities of the bodies found would be confirmed by the forensic report. The police said they have recovered the murder weapons - iron rods and two knives at the farmhouse.
It is believed that money, jealousy, property and possible shifting of the family to Dubai were the cause of the family murder. It was the decision of Khan and her family to migrate to Dubai, and their proximity to Khan's mother Shelina's second husband Asif Sheikh that cost them their lives. Parvez Tak, the third husband of Shelina, piqued that he would be left behind as he didn't have a passport and Asif held the power of attorney to Shelina's properties wiped out the entire family at their Igatpuri farmhouse in Nashik district in February 2011. Investigation of Tak revealed that he intended to flee to Nepal where his Lashkar-e-Taiba (LeT) connections would have helped him to avoid arrest. He was, however, arrested by J&K police in another case, before he could flee to Nepal.
The Police has also detained two persons - Jolly Guilder and Mehboob, who Tak had hired to drive Khan's car from Igatpuri to Indore and onward to Delhi, and finally to Kishtwar where it was eventually recovered.
As a part of their investigations, police are likely to open Khan's bank locker and scan three bank accounts of the family. In November 2012,based on a DNA test report crime branch officer claimed that the remains discovered at Khan's Igatpuri farmhouse belonged to her and her relatives.