The baby was handed over to the parents in a plastic bag.
Parents in India were told that both of their twins, born prematurely, had died in childbirth.
Accusing Delhi's Max Hospital of deliberately trying to get rid of his children's responsibility, the father of the twins, Ashish, said the babies were declared dead after he told the authorities that he could not afford to pay Rs 1 lakh per day for their treatment.
Delhi Health Minister Satyendar Jain on Saturday said that strict action will be taken against city-based private Max Hospital and its licence would be cancelled if required, after the hospital declared dead a live baby, who still remained in a critical condition two days after the incident.
"Strongest action would be taken if found guilty", tweeted Delhi chief minister Arvind Kejriwal on Friday evening. He also said that the same hospital was issued a show-cause notice on November 22 for not fulfilling some norms related to providing services to patients of EWS (economically weaker section) category.
According to the twins' grandfather, the stunned family rushed the newborn to a nearby hospital where they were told that their baby was still alive, local media reported.
Parveen's daughter gave birth to twins early on Thursday, but the daughter was stillborn, he said.
"This baby was one of the twins delivered on 30 November morning".
The police have now registered a case against the Max Hospital in Shalimar Bagh on the basis of a complaint filed by the family.
The Max Hospital in a statement on Friday said, "It has been brought to our attention that a premature (22 weeks), newborn baby who is reported to be on life support at a nursing home was unfortunately handed over without any sign of life by Max Hospital Shalimar Bagh". While the girl was stillborn, the baby boy was declared dead later.
"We are shaken and concerned at this rare incident".
"We have initiated a detailed enquiry, pending which, the concerned doctor has been asked to proceed on leave immediately".
The hospital said it was in constant touch with the parents and ready to extend all support.
"Under the court's direction, we will also consult Delhi Medical Council or Indian Medical council, and convey to them details of all circumstances".
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