The crime branch of the Gurgaon police yesterday recovered the car from Mahal's house in Mitrau village of Najafgarh area, they said.
Mahal, who is jailed in Gurgaon district prison in Bhondsi village, had extorted the car and Rs 9.75 lakh cash from fellow inmate Manish Bhardwaj, a resident of Gurgaon village, in March, they said.
Mahal along with notorious gangsters Bindar Gujjar and Vijay Bhardwaj had allegedly threatened Manish of dire consequence when he went to jail in an Arms act case in March, ACP Crime Ranbir Singh said.
"We have arrested Mahal on the charge of extortion and taken him on 2-day police remand by producing him before judicial magistrate through video conferencing.
"We are investigating the involvement of Gujjar and Vijay in the case," Singh said.
When contacted, Manish told PTI that Mahal, Gujjar and Bhardwaj are running an extortion racket inside the jail.
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