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Addressing a news conference, DySP Jayant Bajbale said the killing was the outcome of a dispute over financial dealings between the deceased, Ganesh Kolhatkar (53), and the accused, Pintu Kisan Sharma (40).
Sharma used to invest in shares, while the victim was running a printing press in Mira Road, he said.
The accused had lent the victim a sum of Rs 1 lakh for his business, of which the latter had returned only Rs 40,000 to the former, Bajbale said.
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During the verbal altercation, the accused pushed the victim following which he died, the DySP said.
The accused cut the body into several pieces, pulled out the flesh and dumped them into the toilet and flushed it following which the sewage system got blocked, he said.
The body parts were recovered Tuesday, Bajbale said.
Sharma was arrested under after police checked all the closed flats in the building and found foul smell emanating from the one taken on rent by him, he said.
He has been booked under IPC sections related to murder and causing disappearance of evidence of offence, the police officer said.