Mahender Singh Kataria (66) and his son Bharat (36), both residents of Naveen Vihar, were arrested in connection with the murder, DCP, Outer District, Vikramjit Singh said.
The body of Sushil, who was brutally hacked to death with some sharp and heavy weapon, was found at his residence on June 20, he added.
During investigation, police got to know that Sushil had developed an intimate relationship with a neighbour which was objected by the girl's family.
As per the confession, Mahendra and Bharat sneaked into Sushil's house and hacked him to death with an axe while he was sleeping. Bharat later dumped their blood-stained clothes and the axe at different locations.
The police has recovered the blood-stained clothes of the accused and the axe, besides the car which was used for disposing the evidence, Singh said.