The Archives department obtained stay from the local court to save the demolition of the historic 'Haveli' situated at Dhaki Munawar Shah of the walled city.
However, the new owner by the time had pulled down the first storey of the building for construction of a commercial plaza on it. The doors and window panes at second and third floors have also been removed.
The Archives officials said they sought police help to halt the razing of the house. They took into custody the labourers who were later freed.
Kapoor's father Prithviraj Kapoor had constructed this house in 1920, where the "Mera Naam Joker" and his siblings were born.
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The Kapoor family later shifted to India after Partition.
During the previous ANP government in KP, the house was declared National heritage but no cogent step was taken to preserve it.
"Thank you for your gesture but that property belongs to the Pakistani Govt. And it is entirely up to them to decide," Rishi wrote.