The infant, who went missing around 8.15 AM from the hospital, however, was rescued from a bus stand near Model Town police station around 3.30 PM, a senior police officer said.
The girl, identified as Atifa, was taken by her mother Rehana to the hospital where she had gone for the blood test of her elder daughter.
While she was busy with formalities of the test, she had handed over Atifa to an unidentified woman, who later vanished from the spot with the infant.
In her complaint, Rehana has alleged that the hospital didn't take quick action when she raised a hue and cry about her missing daughter and only made a PCR call at 8.59 am, the officer said.
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Police earlier said the CCTV cameras in the hospital were "not functioning" and they could not get any footage for clues to track the baby, a charge denied by North Delhi Municipal Corporation (NDMC) which runs the hospital.
A woman came to the Model Town Police Station and told the cops that she had seen the girl crying at the bus stand and handed over the infant to them, a senior police officer said.
Police is on the lookout for the woman who had kidnapped the child. "We had flashed the information with the details of the woman and the child at all metro stations, railway stations, ISBT and all PCR vans across the city.
"We have informed various motor and foot-patrolling teams to look out for all women of the same profile," the officer said, adding, police is scanning the data of all the visitors to the hospital since this morning.
"Our knowledge is that the CCTV cameras at the hospital are functional," he said.