Vijay Majumdar, Vijay Kumar and Deenu Kumar were arrested on Monday for running the racket for the past several months, they said.
The trio would book tickets in bulk under different names and get them confirmed after which they would "sell" them to commuters. Police said they would charge six times the original fare.
Since commuters need not prove their identity while travelling in 2nd class to ticket checkers, the trio made use of the rule and made money.
The trio were arrested after police got a tip off that some persons are running a railway ticket touting racket at Paharganj in New Delhi Railway Station.
A trap was laid and a police constable Narender was deputed as a decoy customer to procure a confirmed/RAC ticket from the capital to Lucknow for yesterday from a tout.
Police then arrested the trio.
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"Almost all tickets are of Sleeper 2nd Class as there is no need for the passenger to give ID proof. Most of the railway tickets are for single passengers only. Few are for two passengers, one male and one female," Sanjay Kumar Jain, Deputy Commissioner of Police, Crime and Railways, said.
The passengers would be briefed that prior to boarding the train, they should check the railway charts affixed on the designated coach to find out the name of the persons in whose name the seat had been reserved.
"They were told to reveal the printed name to the TTE at the time of ticket checking," he said.