Constable Kapil, posted in northeast Delhi, had intercepted Intzar, who was carrying Rs 2.60 lakh for buying a buffalo, on Thursday and took him to an unidentified location before taking Rs one lakh from him, police said.
Following the incident, the Intzar, who runs a dairy in Loni, approached the police with a complaint yesterday, they added.
"Kapil was arrested today for abduction and extortion of Rs one lakh. Police have recovered Rs 96,000 from his possession," DCP (northeast) A K Singla said.