Several female students at the institution had accused him of molestation and the college administration recently came under fire for not taking action in the matter.
Senior Police Inspector RD Malekar said Dr Natrajan (45) was arrested after the dean of Shivaji Hospital, which is attached to the college run by the Thane Municipal Corporation, filed a complaint.
A group of students had two months back complained to authorities that Natrajan often misbehaved with female students and had even molested some of them.
Balasaheb Patil, Deputy Commissioner of Police, said that a case under Section 354 (outraging the modesty of a woman) has been filed in this regard.