Shehnaz was taken into custody along with Tahira and Shamim when she was trying to sell her niece for Rs 70,000 near Wazirabad ISBT.
Acting on a specific information, police raided the area and arrested the trio.
"During interrogation, Shehnaz revealed that after the death of her first husband, she fell in the trap of prostitution. Later on she came in contact with Tahira who is also involved in prostitution racket," a senior police official said.