The four other accused were identified as Pramod Koduskar, Janardan Sakpal, Pratamahesh Parab and Rajesh Tambe, police said.
"The accused, including the wheelchair-bound Ashwin Naik, had come in a car on Bhawani Shankar Road at Dadar in central Mumbai to collect the extortion money of Rs 50 lakh he had demanded from the victim builder. Naik had collected Rs 25 lakh in two instalments from the builder a few days ago," DCP (Zone V) Mahesh Patil said.
Police had got a tip-off that the accused were coming in Dadar area to collect the extortion sum. Accordingly, a trap was laid, he said.
Since Naik himself has been caught while accepting the extortion money from the complainant, it will make our case strong, Patil said.
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According to police, on December 9, Naik's aides had abducted the complainant by threatening him at gunpoint. He was taken to Naik's office in Subhash Nagar area of N M Joshi Marg in central Mumbai, Patil said.
"There, Naik threatened the builder to pay him Rs 75 lakh and 6,000 sq ft area premises in his upcoming project," Patil said.
Meanwhile, all the arrested accused have been booked under relevant sections of IPC for extortion, kidnapping as well as Arms Act, Patil said.
"Police might evoke Maharashtra Control of Organised Crime (MCOCA) Act against Naik in this case," the DCP said.
All the accused will be produced in a court here tomorrow.
53-year-old Naik, an engineering graduate, was left paralysed after he was shot at in April 1994 by a rival gang on the premises of a sessions court at Fort in south Mumbai.
The DCP said Naik has spent a decade in jail in connection with as many as 16 cases against him across the country, including extortions, narcotics and murders.