The Kopri police detained her driver, after which her whereabouts were traced, they said.
Initial reports seemed to suggest that she was fed up with her family and had hence staged a "missing" drama.
How Alka went missing
Alka Punewar is a well-known Marathi actress who has also featured in many Bollywood movies.
Police began investigation in the case and found her car fallen in a deep valley in Khopoli on the Mumbai Pune Express highway in mysterious circumstances on Tuesday, Dec 31.
Kopri police has detained Alka's driver.
The actress had left home on Dec 27 and headed for Pune where she along with her troop were scheduled to hold a function.
However, a suspicious caller had alerted Alka's family members, informed her husband Sanjay Punewar.
The unidentified caller reportedly had called at the land line number of the Punewar's inquiring whether Alka had reached home.
Caller also told Punewar's son Pratik that she had left the shoot after a heated argument and she was not picking her cell. when Pratik tried to inquired more, the caller disconnected the phone.
One close relative of the Punewars was quoted as saying, "It was here we started calling Alka but her cell phone kept ringing."
Another close famile friend of the Punewars informed about the car which was found near the highway.
Earlier, raising many questions, the family friend was quoted as saying, "The car doors are found locked from inside, no blood traces, seat belts are found open, no foul smell of decomposed body or so and more surprisingly Alka's cell phone was found a 100 meters away from the car with her one SIM card and memory card missing."