The accused Ajay Ghosh (32) involved in diamond-setting work attacked Ashok Paul with a sharp-edged weapon and chopped off his hands late last night.
Ashok was with his 8-year-old daughter when the incident occurred, police said adding that nobody present at the spot came to his rescue as the incident scared everyone.
Later, Ghosh himself called up the police control room informing them of the incident following which a police party reached the spot and arrested him.
The victim was rushed to SMS government hospital where doctors declared him brought dead because of excessive bleeding.
During preliminary interrogation, the accused told police that he suspected a man Abhijeet -- who earlier worked with him and later started working with Ashok -- of stealing his diamonds worth Rs 8 lakh at the behest of Ashok.
His suspicion became stronger after Ashok bought a car. In order to teach Ashok a lesson, Ghosh chopped his hands so that he is neither able to work nor drive the car, police said, adding that the accused has no remorse for what he has done, police added.