AIG Rajesh Sharma and DIG (retd) Ajay Kumar Garg used to run the fake office from Raj Nagar and issue "notice" to realtors and other businessmen for "not paying due stamp duty", a senior officer said.
They would then extort money from them to settle their cases, Superintendent of Police (City) Akash Tomar said.
A complaint was received against them following which the matter was probed by the police. The two were arrested after an order was issued by district magistrate Ministhy S, the SP said.
The police will seek their remand further probe the nexus, Tomar said.
The state government yesterday issued the AIG's suspension order.
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