He had a roguish eye.
'What knife?
I do not understand,' he said indulgently.
'The knife thou stolest from the muleteer here present.' 'Oh, that!' replied the soldier, with a deprecating laugh: 'That is a thing unworthy of your Honour's notice.

The rogue in question is a well-known malefactor.

He and I are old acquaintance.' 'By the beard of the Prophet, by the August Coran, I never saw his devil's face until this minute!' bawled the muleteer, who had come up behind me.
'Give back the knife,' I ordered for the second time.
'By Allah, never!' was the cool reply.
'Give it back, I say!' 'No, it cannot be--not even to oblige your Honour, for whose pleasure, Allah knows, I would do almost anything,' murmured the soldier, with a charming smile.

'Demand it not.

Be pleased to understand that if it were your Honour's knife I would return it instantly.