Post-mortem showed the 15-year-old boy, Govind, had died of hanging, a doctor said.
The teenager, who was taken to police station after being accused of pigeon theft, was found dead near his house under suspicious circumstances.
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Some members of the 'Gadia lohar' community had on Wednesday approached the Sonipat police charging the boy with the theft of a pigeon and demanded appropriate action against him, police said.
Govind's family, which staged a protest, here alleged that police took the boy to police station on the pretext of complaint of theft. They alleged police officials demanded Rs 15,000 to release him.
When the family members went to police station with money, they were told that he had been released and he might have committed suicide.
The family members alleged that the boy was brutally beaten.
Police claimed there was a mark around his neck.
Doctors, who conducted the postmortem, said that there was no injury mark on the body. "He died due to hanging," one of the doctors said.
The incident comes close on the heels of two Dalit children being burnt alive at Sunped village in Faridabad.
In the victim's native Devipura village, his elder brother Gautam said that "police demanded money for the release of my brother".
"We found the body in our uncle's house adjacent to ours in the village the next day after police picked him (the boy) up on Wednesday," Gautam said.
Gautam demanded a compensation of Rs 10 lakh from the government.
Meanwhile, National Scheduled Caste and Scheduled Tribe Commission member Ishwar Singh met SP Abhsikek Garg and members of the deceased boy's family at the village.
Police said that the situation is under control.
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