The application was withdrawn by his lawyer I H Syed before the matter came for hearing in the court of Justice R H Shukla.
Mr Verma, who probed the Ishrat Jehan alleged fake encounter case, had approached the high court challenging a notice from the state government asking him to vacate the government flat he occupies in Ahmedabad.
"We withdrew the application because we realised that the high court is not the proper platform to raise this issue. We will now knock the doors of CAT on this matter," Mr Syed said.
Mr Verma, who was in August 2014 appointed Chief Vigilance Officer of North Eastern Electrical Power Corp at its headquarter in Shillong, was recently transferred to Central Reserve Police Force with a posting in the North East.
He, however, continues to occupy a flat in Samarpan Government Colony in the city where his family members reside.
The police officer was allotted a bungalow at Shillong after his posting there. The Gujarat government issued him a notice, stating he cannot occupy two official flats and should give up the apartment in Ahmedabad as he has been transferred to CRPF.
Mr Verma, in a special civil application filed earlier this week, had said All-India Services Rule allows an officer to occupy two flats in case he is transferred to the North East.
The 1986-batch IPS officer was part of a three-member SIT appointed by the HC to probe the Ishrat encounter case.
He had taken a different stand than his two colleagues and filed an affidavit in the HC, saying the encounter could have been staged, and also cast doubt over police claim of Ishrat, a teenager from Mumbai, being a Lakshar terrorist.
After the SIT concluded that it was a fake encounter, Mr Verma was made part of the CBI team that investigated the case and chargesheeted IPS officers, including P P Pandey, D G Vanzara and G L Singhal.
His recent application in the HC seeking a copy of the second charge sheet filed by CBI in the alleged fake encounter case was rejected.
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