Reacting to criticism over inaction in the matter, the Ludhiana police commissioner also suspended three police officers, including the station house officer (SHO) of Daba police station, for not carrying out their duties.
The action came after the National Commission for Scheduled Castes and the National Commission for Women intervened.
The victim in this case was allegedly beaten by four men with iron rods and sticks. The assault, which took place April 3, was captured on camera.
Police officials said the woman had gone to meet the accused and demanded that they return the Rs.20,000 that they owed to her. After she insisted that her money be refunded, the men assaulted her with iron rods and sticks.
Though there were other people present on the spot, none came to the rescue of the helpless woman.
An elderly man and another woman were seen in the video trying to stop the men but they were also attacked. The victim was not only assaulted with the iron rods and sticks but was pushed to the ground and thrashed even as she cried for help.
The victim had filed a complaint, leading police in Ludhiana, about 100 km from the state capital Chandigarh, to register the case.
The case comes close on the heels of last month's incident of Punjab police officers brutally thrashing a young woman in Tarn Taran district.