The mutilated body of Jitan Sahni, 70, was found at his home in Darbhanga district on Tuesday.
Police on Wednesday said the key accused in the killing of the father of former Bihar minister and Vikassheel Insaan Party (VIP) chief Mukesh Sahni had been arrested and that he was murdered over a Rs 1.5 lakh loan.
The mutilated body of Jitan Sahni, 70, was found at his home in Darbhanga district on Tuesday.
Police said they have arrested the prime accused, identified as Qazim Ansari, a resident of Supaul Bazar locality where the former minister's ancestral home is located.
During interrogation, the 40-year-old told police that he had borrowed Rs 1.5 lakh in three installments from Jitan Sahni.
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The loan was taken at four per cent monthly interest against a piece of land he owned. The accused, however, was unable to take back the piece of land because of his "inability to pay", police said.
"On the intervening night of Monday and Tuesday, Qasim along with his associates entered Jitan Sahni's house and asked for the documents of his land. Sahni refused to hand over the documents and started abusing them. This irked Ansari and he stabbed him with his associates assisting him in the act," the police statement said.
"After the murder, the accused tried to find the key to the lock on the almirah so that they could take the land documents. However, they didn't find the key and decided to throw the wooden almirah in a nearby pond so that the documents get destroyed," the police added.
A search is underway to trace Ansari's associates, police said.