After outrage from the public, the hospital suspended two doctors for wrongly declaring the newborn dead.
An inquiry is underway, and if the doctors are charged and found guilty of attempted culpable homicide, they could face up to seven years in prison.
A Max hospital spokesperson stated: "It has been brought to our attention that a pre-mature (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.
"This baby was one of the twins delivered on the morning of Nov 30. The other baby was still-born. We are shaken and concerned at this rare incident. We have initiated a detailed inquiry, pending which, the concerned doctor has been asked to proceed on leave immediately. We are in constant touch with the parents and are providing all the support needed."
The baby boy is now reportedly receiving treatment at the Delhi New Born Centre and is in a critical condition, according to news.com.au.
"He is on ventilator support, nutrition support and other supports. We are managing to maintain his vitals at the moment but the condition is very serious," said Dr Sandeep Gupta, from the Centre.
The family is reportedly unsure if the boy will survive but they will not be taking him back to Max Hospital.
"We don't want to keep our baby at Max Hospital. We don't trust the doctors there. They betrayed us," Malik said.
An inquiry into the incident is underway, with four medical staff who were allegedly part of the team that declared the baby dead being questioned on Monday.
Delhi Chief Minister Arvind Kejriwal took to Twitter to confirm an investigation was underway while the state Health Minister Satyendar Jain described the incident as "shocking criminal negligence".
According to police, the focus of the questioning was to find out the specific duties of each team member and recreate the chain of events that led to the newborn being wrongfully declared dead, The Times of India reported.
Officers are also looking into three injections that were allegedly administered to the child at a cost of $710 (35,000 rupees) and were meant to increase the chances of survival.
Along with this are claims by the boy's father that the hospital had asked them to pay a fee for keeping the baby in the nursery, with the child being declared dead while they were discussing whether to keep the newborn there or not.
According to reports, police sources said that if the allegations were found to be true, the hospital might be charged for extortion.
Delhi Health Minister Satyendar Jain declared on Saturday that strict action will be taken against the hospital and its licence would be cancelled if need be.
- additional reporting news.com.au