With a capacity for housing 94 inmates, the shelter home accommodates 47 girls and 34 boys at present.
An NGO-run shelter home was sealed in Odisha's Dhenkanal district following allegations that the minor inmates there were sexually abused, while two people, including its chief, were arrested Sunday, police said.
The action came two-days after District Child Protection Officer (DCPO) Anuradha Goswami and members of the Child Welfare Committee (CWC) raided the shelter home, acting on media reports about girls being abused at the facility.
"The private shelter home, which has been operating illegally at Beltikiri area, was shut down by the police in presence of Dhenkanal Sadar Tehsildar U K Mohapatra and the DCPO," a district official said.
Dhenkanal Sub-Divisional Police Officer (SDPO) Sk Abdul Karim said the managing director of the shelter home, Fayaz Rahman, and another employee, Udit Lima, were arrested Sunday.
The in-charge of the home, Simanchal Nayak, was arrested on Saturday.
The girls at the home had alleged that they were harassed sexually, physically and mentally by Nayak over the past two years.
Nayak has, however, denied the allegations and said they had done so as he had tried to enforce discipline at the shelter home.
Odisha Women and Child Development Minister (WCD) Prafulla Samal has described the centre as "unregistered and illegal", and ordered its immediate closure.
Asserting that strict action would be taken against the offenders, she said district collectors across the state have been asked to shut down all 22 branches of the shelter home, operated by NGO Good News India.
Dhenkanal District Collector Nikhil Pavan Kalyan said a thorough investigation into the matter is in progress and appropriate action would be taken.
Senior officials of the district administration visited the shelter home and examined certain documents besides questioning the staff.
The inmates of the Dhenkanal shelter home -- 47 girls and 34 boys aged between 5 and 16 years -- have been shifted to another childcare institution nearby, Mohaptra said.
The incident triggered sharp reaction from different quarters with opposition political parties coming down heavily on the BJD government.
Union Petroleum Minister and BJP leader Dharmendra Pradhan demanded the resignation of state Women and Child Development (WCD) Minister Prafulla Samal for the government's "failure" in preventing illegal functioning of the unregistered shelter home.
Senior Congress leader and former Union Minister Srikant Jena said the BJD government has "failed miserably in discharging" its responsibility.
The WCD minister, however, said the issue should not be politicised and asserted that the state government will leave no stone unturned to punish the guilty.
Meanwhile, a fact-finding team of the state BJP, led by its women's wing president Prabhati Parida, visited Beltikiri Sunday to assess the situation.
The team interacted with the locals to find out the modus operandi of the shelter home, sources in the party said.
Hitting out at the state government, Parida alleged that the administration, local police and WCD minister had "knowledge about the illegal home".
Earlier this year, the Central government had directed all states to inspect shelter homes in the aftermath of two alleged sexual abuse cases in Bihar and Uttar Pradesh.