The 1993 blockbuster, starring Sanjay and Madhuri Dixit was produced and directed by Subhash Ghai. The action thriller film is likely to return either in form of a sequel or a remake.
"We are planning something on Khalnayak. We are working on that. We have few directors on board and we will make the announcement soon. We don't want to reveal much now," Subhash Ghai told PTI.
The film revolved around the escape and capture of a criminal Ballu (Sanjay) by Inspector Ram (Jackie Shroff) and his girlfriend officer Ganga (Madhuri).
"We are looking to present the story in a contemporary way," Subhash Ghai said.
Mr Dutt, who was riding high on the success of his movie Khalnayak, was in for shock when he was arrested for his alleged involvement in the 1993 serial bomb blasts case.
The actor's conviction for possession of arms was upheld by the Supreme Court this year and he was sentenced to five years in jail.
Mr Dutt who has already undergone one and a half year in prison has been given time till May 17 by the apex court to surrender.