Parminder Singh approached the 17-year-old accused on Tuesday after he had appeared in a local court in Punjab state charged with raping the then seven-month-old girl in 2014.
Police said the 25-year-old Singh lured the teenager away from the court in Bathinda district by offering him an out-of-court settlement, before tieing him to a tree and cutting off both of his hands.
Pims rape case: Suspect remanded for three days
"He (the father) took him near a dried up canal, beat him up badly and then tied him to a tree and finally hacked his hands off. There is nothing below the wrists now," Swapan Sharma, a senior police officer of Bathinda, told AFP by telephone.
"Locals alerted police and we rushed to the spot. We picked him up, his hands, and took him to the hospital," he said, adding that the accused was in a stable condition.
Sharma said police were hunting for the father, a brick kiln labourer who fled after the attack, and have registered a case of attempted murder against him.
The mother of the girl allegedly found the accused molesting her in April 2014. Police registered a rape case and the teen was sent to a juvenile remedial home pending a trial.
Indian teen raped by over hundred men, including police personnel
India has a grim record of sexual assaults and there are occasional reports of vigilante justice meted out to rapists, in a country with a notoriously slow and sometimes corrupt legal justice system.
The fatal gang-rape of a student on a bus in New Delhi in 2012 unleashed a wave of public outrage and street protests against violence against women in India.
That incident prompted the government to toughen penalities for rapists and overhaul policing to better protect women and children.
In November 2014, an Indian father tortured and killed his daughter's alleged rapist before turning himself in to police.
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