The Indian government has ordered an immediate inspection of every shelter run by the Missionaries of Charity, which is based in Ranchi, the capital of Jharkhand state in the east of the country.
It comes following the arrest of nun Anima Indwar and a care home worker, who were taken into custody amid claims that several infants had been sold, with one couple having allegedly paid 120,000 rupees (£1,333).
The case came to light after local child welfare authorities informed police about a newborn missing from one of the homes, which were set up to care for people Mother Teresa described as “the poorest of the poor”.
Police have confirmed that they are investigating at least three complaints, but the charity – which was set up by the famous missionary in Kolkata in 1950 – has denied that any children had been sold.
Spokeswoman Sunita Kumar said that “there was no question of selling any child as the Missionaries of Charity had stopped giving children for adoption three years ago”.
The charity was previously involved in providing legal adoption services, but in 2015 said it would close down its adoption centres due to new regulations that made it easier for single and divorced people to adopt children.
Since then, it is said to have focused on helping unwed pregnant women and mothers in distress.
According to the government, illegal adoption is big business in India, with more than 100,000 children reported missing every year.
Many are given up by their parents who cannot afford to look after them, and others are snatched from hospitals and train stations.