Arun Kumar, 27, who works as a compounder on contractual basis, was running the racket on the directions of Amit Shukla, who is currently in the jail.
The action came on an information that some desperate gangsters, lodged in Tihar Jail, were orchestrating their criminal activities from the jail premises through their associates.
"It was found that Shukla had called a businessman and asked him to pay Rs 50,000 as extortion money failing which he would be implicated in a criminal case," a senior police official said.
Fearing for his life, complainant Rajender Saraf had given Rs 50,000 to a person on the directions of Shukla.
Arun Kumar, who had collected the amount from Rajender on Friday last, was apprehended from Mukund Vihar in Delhi.
During his tenure in the jail, he had came in contact with Shukla and developed a friendship.
"He also procured a mobile phone and a SIM card for Amit Shukla, which was to be used for making extortion calls," the official said.