Shambhu was arrested along with his associate Mobin for killing Malkhan after they had a fight while consuming liquor on the evening of December 31, they said.
Police said that during interrogation, Shambhu disclosed that he and Mobin were known to Malkhan and the three were having liquor near a canal that day.
"During consumption of alcohol, a quarrel took place between Mobin and Malkhan on a matter involving just Rs 50-100. Being friend of Mobin, he (Shambhu) also supported Mobin. They both thrashed Malkhan with the intention to kill him," Joint Commissioner of Police (Crime) Ravindra Yadav said.
Yadav said a complaint was made by the deceased's father that on December 31 his son had gone to their neighbour's house but did not return and on the next morning, his dead body with injury marks was found near a canal, adjacent to their colony.
A case was lodged in the matter at Kanjhawala police station here.