Police swung into action immediately after Anil's body was found and zeroed-in on the two rickshaw pullers, Mithun and Manoj Kumar, as local said the victim was last seen with them.
During interrogation, the duo told police that Anil used to bully rickshaw pullers and shopkeepers, and forcefully take earnings of vagabonds who slept on footpath in Karol Bagh area.
On Thursday night, a group that included Mithun and Manoj attacked Anil who was in an inebriated state.
"People who were sick of extortions by Anil attacked him with stones resulting in his death. After that, they threw the body in the underground water tank," a senior police official said.
Police are on the look out for the remaining persons who attacked the victim.