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The incident took place on Saturday night at Elante Mall, where the boy and his family from Balachaur in Nawanshahr, Punjab, were enjoying an outing, they said.
A purported CCTV footage of the incident has surfaced on social media.
According to the police, Shahbaz was sitting in the last compartment, which overturned as the toy train made a turn, leaving the boy with severe head injuries.
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Shahbaz was rushed to the government medical college and hospital in Sector 32, where he died, a senior police official said.
“A case has been registered against the person who was operating the train and also the management of the mall,” the police official said.
The case has been registered under section 304-A (causing death by negligence) of the Indian Penal Code (IPC) at the Industrial Area Phase-1 here, he added.
The police have also taken the toy train in their custody.