Paradkar and another gangster Raghu Shetty, both associated with Rajan, had allegedly demanded Rs 15 crore from a suburban Bhandup-based Slum Rehabilitation Authority (SRA) developer, police claimed.
In this connection, the Bhandup police arrested Shatlya today, Mumbai's Joint Commissioner of Police Deven Bharti said.
Both Shetty and Rajan are wanted in connection with the extortion case, he said.
On September 5, Shatlya had allegedly made the extortion demand at the behest of Rajan. The money was demanded for a Wadala SRA project which the developer has taken up for construction, police said.
Shatlya is said to be the right-hand man of Rajan, who was arrested Bali on his arrival from Australia on October 25. Rajan is likely to be deported to India soon.
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