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The arrested youth, Malak Singh, is suspected of having painted graffiti in Delhi and other parts of India at the behest of Gurpatwant Singh Pannu, the chief of banned outfit Sikhs for Justice, the police sources said on Tuesday.
Raids are underway in Punjab, they said.
Police had registered an FIR on September 27 after pro-Khalistan and anti-India slogans were found on the Kashmere Gate flyover.