Esther went missing after arriving at the LTT railway station in Mumbai from her hometown Jan 5. Her decomposed body was found in Kanjurmarg in Vikhroli Jan 16.
The Special Investigation Team (SIT) questioned the suspect at Kurla police station after they reportedly established that he was the man seen walking with Esther in the CCTV footage from the railway station.
The footage shows Esther talking over a mobile phone while walking out at 5.10 a.m. A man in white shirt and jeans is seen carrying her luggage.
The man, who is suspected to be involved in several criminal cases at railway stations, is said to be a taxi driver.
Esther's family, however, said they would believe the police version only after they recover her laptop, bag and other belongings from the suspect.
"Our relatives are meeting police officers in Mumbai to know the details. Police have to recover the laptop and bag from the man and then only we will be convinced that he is the culprit," Esther's father Surendra Prasad said in Machilipatnam.
There is still no clarity as to who Esther was speaking to.
Surendra Prasad had told police that she made the last phone call on the night of Jan 4 when the Visakhapatnam-Mumbai LTT Express, which she had boarded at Vijayawada, reached Pune.
She promised to call the family after reaching her hostel at Andheri in Mumbai. As she did not call again, the family lodged a police complaint.The techie, who was working with the Tata Consultancy Services' Goregaon facility, went missing after returning to Mumbai after the Christmas holidays in Machilipatnam.
The reported breakthrough came just when it was thought that the case has reached a dead end.
The man seen in CCTV footage remained untraceable for 45 days.