Police also revealed that the incident is coming days after another teenager was burned to death in the same state.
In an unrelated case, a 16-year-old girl was set alight after telling police she had been gang-raped.
The family in its complaint said Bacchan Mondal entered the house while she was alone and committed the crime.
Authorities believe the teenager was kidnapped from her rural home Thursday night, while her family was at a wedding, and raped in a nearby forest.
She suffered first-degree burns to 70 percent of her body.
The 17-year-old girl is in a critical condition and fighting for her life in a hospital in the state of Jharkhand. "We will provide security to family members till they feel secure", said Shambhu Thakur, Inspector General of Chatra police.
Mr. Bhuiyan, who initially escaped through a window after he killed the girl, was captured on Saturday, Mr. Singh said. However, the accused had refused to obey the panchayat's directive and instead, barged into the house of the victim with his henchmen and assaulted the girl's parents, before setting her on fire, the police said.
The main suspect in that case is said to have been angered by a village council punishment of 100 sit-ups and the equivalent of US$750 (S$1,000) as fine for raping the girl.
Police in Jharkhand quickly detained 15 people in relation to the crime, including the village chief.
In late April, the Indian government has approved the introduction of the death penalty for the rape of children under the age of 12 years.