Police said the deceased was identified as Subhash, a resident of New Colony in Shahbad Dairy area.
According to police, Subhash's wife Sudha filed a missing complaint on March 4 after her husband did not return home till late night.
In her complaint, she had mentioned that Subhash went to meet his friends Satyavan and Naveen Maan on his motorbike but did not come back, police said.
"When the level of water receded, a body was found with hands and legs tied with shoe laces. A heavy stone was also tied with the jersey, so that body doesn't float," a senior officer said, adding, the deceased's motorbike was also recovered from the canal.
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Two of Subhash's friends were arrested in connection with the murder after they allegedly confessed to the crime during interrogation.
"During interrogation, it was revealed that Subhash had alcohol at Sector-5 Bawana along with Satyavan, Naveen, Sanjay, Anil Maan and Ratin. Soon, Satywan, Naveen and Sanjay left for home leaving behind Subhash with Anil and Ratin," a senior police officer said.
"Subhash on his motor bike was returning with Anil and Ratin, when they had an altercation over a petty issue. In fit of rage, Anil and Ratin attacked Subhash and throttled him to death. They tied his hands and legs with shoe lace and threw his body in the canal. They also pushed his motorbike into the canal," police said, adding Anil and Ratin have been arrested.