The police revealed that T. Maruthi Rao, the main accused, struck the deal to kill his son-in-law Pranay Kumar for Rs 1 crore.

The accused include Asgar Ali and Mohammed Abul Bari, who were earlier arrested and acquitted in the murder of former Gujarat Home Minister Haren Pandya.

Pranay Kumar, 23, was hacked to death on Friday as he was coming out of a hospital in Miryalguda town of Nalgonda district along with his wife Amrutha Varshini, with whom he had an inter-caste marriage.

Nalgonda Superintendent of Police A.V. Ranganath told reporters that they have cracked the sensational case, which evoked huge public outrage.

Amrutha and Pranay, who were in love since their school days, had married in January this year against the wishes of her father Maruthi Rao, a businessman who comes from an upper caste.

According to the police, Maruthi Rao hatched the plot to eliminate Pranay with the help of Asgar Ali, Bari and Abdul Karim. Maruthi Rao's brother T. Shravan and driver S. Shiva are the other accused.

The police chief said the conspiracy was hatched in July. The deal was struck for Rs 1 crore though Asgar and Bari had demanded Rs 2.5 crore. Maruthi Rao had paid Rs 15 lakh advance.

"In the meantime, when Amrutha became pregnant, his father tried to pressurise her to abort because he was afraid that if Pranay is killed and a child is born to her daughter, it will lead to more problems. She, however, refused to abort," the SP said.

The investigations revealed that the gang failed to execute the plot on couple of occasions.

As the couple was sensing danger to their lives, the police had suggested them to install CCTVs around their house. On August 17, they hosted a wedding reception, which further angered Maruthi Rao and he speeded up his efforts to get Pranay killed.

On September 14, when Pranay was coming out of a hospital along with his wife following a regular pregnancy check-up, an unidentified armed with axe attacked him from behind. Pranay died on the spot even as his wife ran into hospital screaming for help. The horrific images were captured in CCTV.

After questioning Maruthi Rao and others, the police identified the killer as Subhash Sharma, a native of Bihar, whom Bari had met in Rajahmundry Central Jail.

Sharma was taken into custody from Jagatsinhpur in Samastipur district of Bihar. A Samastipur police officer Paritish Kumar said Sharma was arrested by a team of Telangana Police along with the local police. He was produced in a court and handed over to the Telangana Police on transit remand.

Both Asgar Ali of Nalgonda and Bari of Hyderabad were arrested in 2003 for their alleged involvement in the killing of former Gujarat Home Minister Haren Pandya. The police had claimed that they underwent terrorist training.

An anti-terror court in Gujarat had sentenced them along with seven others to life imprisonment in 2007. However, Gujarat High Court later acquitted them.