A poor couple, both daily wage earners aged 30 and 25, sold their two-year-old son, their third child, for Rs 22,000 about 10 days ago.
The child's buyer refused when the couple offered Rs 30,000 for its return, after their neighbours criticised the poor parents.
Heated altercations took place between the two sides and their supporters.
After being informed, the police took K Veeraiah, the buyer of the child into custody. However, he told the police that he had legally adopted the baby after fulfilling all legal formalities. He also produced documents to support his case.