Uttar Pradesh Special Task Force arrested Nazare Hussain, local jeweller Shanker Seth and his son Sujit Seth.
Four silver shehnais and a wooden and silver one were stolen from Khan's son Kazim Hussain's home here on December 4.
The shehnais were recovered in a melted condition from a local jewellery shop here, police said.
Kazim's son Nazare got the four silver shehnais melted by jewellers Shanker and Sujit Seth in Chetganj area here, they said.
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"The stolen shehnais were sold to the local jewellers for a meagre Rs 17,000 and melted," said STF SSP Amit Pathak.
An FIR was registered on December 5 at Chowk police station after the theft at Kazim's house in Dalmandi area.
According to the family, the shehnais were very special to the late musician and were gifted to him by former Prime Minister P V Narasimha Rao, Kapil Sibal and Lalu Prasad.