The accused, identified as Alpesh Patel, was apprehended on Tuesday by a team of the Mumbai Police's crime branch unit-11 from Mehsana in Gujarat, police said.
The extortion case has been registered at Goregaon police station in the metropolis and Sachin Waze is the main accused.
The ACB is conducting a separate inquiry against Singh on the complaint of police inspector Anup Dange who had claimed the senior IPS officer demanded money for reinstating him through a relative.
Tarique Abdul Karim Merchanta alias Tarique Parveen (55), who was already in jail in another case, was wanted in the case registered with the Thane Nagar police station here, an official said.
Param Bir's plea against Maha govt's inquiries can be adjudicated by administrative tribunal: Bombay HC
Singh in his petition has challenged two orders of the state government initiating preliminary inquiries against him.
The Central probe agency "under the pressure of Union government" concealed several uncomfortable facts in its charge sheet, claimed NCP spokesperson and Maharashtra minister Nawab Malik.
After an SUV with gelatin sticks was found near Ambani's south Mumbai residence 'Antilia', an outfit called 'Jaish Ul Hind' had claimed responsibility for it on social media platform Telegram.
The commission had issued summons to Param Bir Singh multiple times to appear before it, but he failed to do so, hence, the panel issued a bailable warrant against him, a government lawyer said.
The Commission had summoned Singh thrice but he had failed to appear in two hearings, while a third was attended by his lawyer.
Former Maharashtra police chief Param Bir Singh had accused Deshmukh of directing a police officer to collect over Rs 100 crore from bars in Mumbai every month.
In his affidavit, the builder described the manner in which Waze extorted money from him, allegedly at the behest of Param Bir Singh.
The Justice Chandiwal committee was constituted by the Maharashtra government to look into the allegations of corruption levelled by Param Bir Singh against the state's ex-home minister Anil Deshmukh.
On July 22, Marine Drive police station in Mumbai had registered an FIR against Singh, five other police personnel, and two more persons for allegedly demanding Rs 15 crore from a builder.
During the previous hearing, the probe panel had given Singh the 'last chance' to appear before it.
Extortion case: Lookout notice issued against ex-Mumbai Police Commissioner Param Bir Singh in Thane
Besides Singh, who earlier served as the Thane Police Commissioner, the extortion FIR names several other police officers.