The accused Aarti Yadav has been arrested last night and produced before a court today, which remanded her in police custody till September 17, said Assistant Police Commissioner (Santacruz division) D Jadhav.
Preliminary probe suggested that financial dispute led her to first strangulate constable Dilip Borole with a rope before wrapping his body in a mattress and setting in on fire, in the room in Indira Nagar slums.
She then escaped from the room rented by her, police said.
Since the door of the room was locked from outside, they suspected foul play and informed the police, who rushed to the spot and broke open the door when they found the body of Borole, a resident of Kalyan, who is survived by a wife and daughter.
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The assailant fled with Borole's mobile phone, identity card and other belongings, including his clothes, to conceal his identity, said police.
According to police sources, accused Yadav had borrowed Rs 20,000 from Borole about two months ago to take Santacruz shanty on rent.