Another accused, however, continues to be absconding.
"The accused, identified as Mohammed Firoz (21), has been arrested in connection with the murder of one Rizwan. Firoz's associate Rashid, however, still remains at large," DCP (Northeast) Veenu Bansal said.
In a press statement issued earlier, the police had said that they had failed to trace the "mouse" which was a "prime witness" in the case. However, the statement was later dropped in a revised release.
Both Rizwan and Ali were rushed to GTB Hospital, where Rizwan succumbed to his injuries.
After being declared fit for a statement, Ali told the police that a youth - who later turned out to be Firoz - tried to release a caged mouse but left after threatening him and Rizwan when they objected to it.
Based on a tip-off, the police arrested Firoz from his hideout at Seemapuri area. The dagger has also been recovered. Presently, the police are looking for Rashid.
Both accused have been booked under Sections 302 (murder) and 307 (attempt to murder) of IPC, Bansal said.
