The 59-year-old French national, who had retired to Paris' Chinese quarter in 1997 after 21 years in Indian jails, resurfaced last week in Kathmandu's tourist district and was arrested early on Friday morning at an all-night casino.
Sobhraj, nicknamed The Serpent for his repeated identity thefts and escapes from justice, will be charged on Monday for the double murder in 1975 of a Canadian man and American woman who died during the height of the Kathmandu hippie scene.
According to published reports from the time, Annabella Tremont died of multiple stab wounds. Police initially thought the culprit was the Canadian, Laddie DuParr, who was registered leaving Nepal just days before.
But the ashes of DuParr were found in a field – leading police to conclude that his passport had been stolen. DuParr had come to the kingdom in hopes of conquering Mount Everest.
Serpent claims innocence
A police official involved in Sobhraj's interrogation on Saturday said The Serpent had claimed innocence.
"He has challenged authorities to prove he was even in Nepal in 1975," the official told AFP.
The official said Nepalese clerks were sent scrambling to dig up the murder case filed against Sobhraj in 1976.
The court could instead charge Sobhraj for entering Nepal via Dubai on a Dutch passport that identified him as Henricus Bintanja. Police said they later found his French passport which listed him as Charles Sobhraj Gurmukh.
A conviction for murder could land Sobhraj life in prison in Nepal, which does not have the death penalty. The false identify charge carries up to three years' imprisonment and a fine of $670.
Sobhraj was born in Saigon, now Ho Chi Minh city, to an Indian businessman and a Vietnamese mother who remarried a French soldier.
Photographed with beret
He was almost always photographed wearing a beret and called his life a rebellion against the French legal system and a testament to his love for Asia.
In an interview with Richard Neville, the author of a 1979 biography on him, Sobhraj said: "As long as I can talk to people, I can manipulate them."
Sobhraj eventually arrived in Thailand after travelling the world. It was there where he would be implicated in his first murder, a young American woman whose body was found lying on a beach in Pattaya.
He has since been implicated in more than 20 killings, with the victims drugged, strangled, beaten or burned.
Sobhraj was finally captured in 1976, in India after a French tourist, Luc Salomon, died from poisoning at a hotel in New Delhi.