Deputy Commissioner of Police, ATS, Vikram Deshmane said that the gang of accused were manufacturing the drug surreptitiously at a lab in Panvel, Raigad and then distributed it in Mumbai, Thane and other places.
The accused arrested are: Abdur Razzaque Shaikh, 47, Irfan Shaikh, 43, Suleman Shaikh, 28, Naresh Maskar, 44 and Jitendra Pramath.
The operation followed a tipoff about some unknown suspects who were engaged in manufacture, transport and sale of the banned drugs, the DCP said.
The ATS laid a trap and intercepted the accused on the Eastern Express Highway.
"Initially, we recovered and seized 9 kg of MD. However, during interrogation and further investigation, we learnt about a factory which was converted as a lab for manufacturing the banned drug, Mephedrone," Deshmane said.
Armed with the information, the ATS raided the factory and found another 120 kg drug from there and Rs 1.04 crore cash.
Deshmane said that as per available information, this could be one of the biggest narcotics networks bust and further probe is underway to nab all others involved.
Revealing the gang's modus operandi, he said the accused manufactured the drug in powder form and later despatched it for sale in various areas in and around Mumbai area.
A raid on the lab revealed it had a sophisticated setup to manufacture the drug.
The ATS is also probing other angles, including the possible involvement of some persons with expert knowledge of pharmaceutical formulations, involved in this racket, the DCP said.
( With inputs from IANS )