Singh, who was decorated with President Police Medal about four months ago, continued to be grilled by a team of police and intelligence investigators.
His office at Srinagar airport, where he was posted as deputy superintendent of police in the anti-hijacking squad, was sealed, they said.
Piecing together the chain of events, the officials said the two terrorists -- self-styled district commander of banned Hizbul Mujahideen, Naveed Baba, and Altaf -- were taken to the officer's home on Friday by a lawyer Irfan, who the police said was an overground worker for terror groups.
Singh reported absent from duty on Saturday, the day he was apprehended by a team of policemen along with the other three at Mir Bazar on the national highway.
The DSP had applied for leave from Sunday till Thursday, they said.
Police had carried out searches at his residence here and seized two pistols and an AK rifle beside a large quantity of ammunition.
Singh, whose name had been cleared for promotion as superintendent of police, is also likely to lose the gallantry medal that was awarded to him last year, the officials said.
The DSP is deemed to have been suspended after having completed 48 hours in police custody, they said quoting service rules.
On Sunday evening, his office at the Srinagar airport, where he was posted as DSP in the anti-hijacking unit, was sealed so that no evidence could be tampered with, the officials said.
Singh was arrested at a checkpoint on a national highway by a team of policemen, who were following the case after intelligence inputs suggested that Naveed Baba was being moved out of the valley.
Caught on the wrong side of the law, all excuses by Singh failed to enthuse police officers who effected his arrest and carried out a search at his residence in Srinagar where he had kept Naveed and his associate Altaf, a recent joinee in the banned terror outfit, the officials said.
Initially, he repeatedly claimed that he was trying to win the confidence of the terrorists to catch a 'bigger fish' but could not substantiate the reasons for not following due protocol.
Singh's arrest may have affected the image of Jammu and Kashmir Police but former director general of police Kuldeep Khoda lauded the police force for not hesitating even once in arresting their senior officer.
"It is the JKP which has caught its own officer. They laid the trap as they do for other terrorists and managed to arrest the DySp. No one can cast any doubt on the police force which has been rendering service to the nation especially during the last 30 years of militancy in the valley," Khoda said.
Another former police chief A K Suri said though the incident is an unfortunate one, what is more important that the culprit has been arrested.
"This is not the only case. In the past also some policemen were under suspicion and were arrested," he said.
This is not the first time that Singh has been in the news for the wrong reasons.
In a letter written in 2013, Afzal Guru, who was executed after being convicted for the Parliament attack, explained how 'DSP Davinder Singh', the then deputy superintendent of police of Special Operations Group, had asked him to "take Mohammad", a co-accused in the Parliament attack case, 'to Delhi, rent a flat for his stay and purchase a car for him'.
However, the angle was probed and could not be substantiated with any evidence, the officials said.
The entire operation was monitored by the Deputy Inspector General of Police (South Kashmir) Atul Goyal who himself stood at an intersection to intercept the vehicle.
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