An Indian couple from the north western state of Rajasthan were arrested on Thursday for allegedly selling their new-born child to their neighbour for Rs.40,000, BBC reported.

According to the police, the poverty-driven couple was in an urgent need of money to fund the treatment of their 2-year-old paralytic son and thus decided to put up their seven-day-old baby on sale.

"Since the couple could not pay for the treatment of their son, a middleman lured them to sign a deal with the neighbour, who wanted a child," a senior police official told the news channel.

The parents, Sandhya Devi and Ashok Kumar of Sriganganagar district in Rajasthan had promised their neighbour Vinod Agarwal before the child's birth that they would sell their new-born to them for Rs.40,000, and as per their deal, half payment was already given while Sandhya was pregnant and the rest was supposed to be given after the boy was handed over to the buyer on August 03.

However, on not receiving the remaining amount on time even after handing over the baby, the couple filed a complaint against Agarwal in a nearby police station.

"My elder child was sick so I had to give the newborn for adoption for 40,000 rupees, but I only got 20,000 rupees," Kumar told NDTV.

"Sandhya was pregnant at that time. When her neighbour Vinod Agarwal came to know that she was in need of money, he offered to bear the treatment cost of her paralytic son. In exchange, he demanded that she would have to sell her baby after delivery, in case it is a boy," a police official said.

Soon after the anti-human trafficking team in the city got the inkling of the illegal deal, an investigation was launched and both the couples were arrested. Later, they were released on bail.

Meanwhile, a case has also been lodged against the government officials who helped them complete the adoption formalities and the child has been handed over to the biological parents.