The police rescued the woman who was being paraded with slippers hanging from her neck in Ghataprabha near Gokak in Belagavi district on Saturday night.
As many as 13 people who were said to be responsible for the offence have been arrested.
The victim was identified as Sridevi Godachi of Ghataprabha.
A crowd of 15 people, including some women, assaulted her and paraded her after putting a garland of slippers around her neck, the police said.
They accused her of blackmailing some traders and extracting money from them.
Some onlookers who saw this informed the police who intervened when she was being taken to the traffic circle near the railway station there.
The police rescued her and shifted her to the District Civil Hospital in Belagavi by midnight. She is recovering.
Superintendent of Police Bhimashankar Guled said that all the accused have been arrested.
A case has been registered based on the victim’s complaint. The accused have been produced in court that remanded them in judicial custody, the Superintendent of Police said.
Sources in the police said that the victim told investigators that some youth from Ghataprabha had beaten her up after she refused to heed their demand for money. Investigation is on.