Sandip Krishna Khilare, 24, a resident of Hadapsar who heads the Lokmangal Cab Services Association was on Saturday arrested by the crime branch based on a complaint from a company that has been awarded the contract to collect entry tax in Khadki area.
Inspector Sachin Sawant of the anti-extortion cell said Khilare was threatening the contractor of the company that he would register a police complaint if he is not paid extortion amount of Rs 5 lakh which he later brought down to Rs 3 lakh after negotiations. The contractor paid him Rs 20,000 after Khilare threatened to harm him, police said adding that Khilare also demanded Rs 30,000 every month as hafta.
A team from the cell laid a trap and arrested Khilare when he had reached Holkar Bridge to collect the amount from the contractor. Khilare has several earlier offences registered against him, police said.