The motive of the murder still remains a mystery though Indrani's son Mikhail claimed he knew the real reason but would not disclose it.
Police also claimed that former STAR India Chief Executive Officer Peter Mukerjea's wife Indrani was present at the site in Raigad district where Sheena was killed in 2012.
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Mumbai Police Commissioner Rakesh Maria told reporters here that the murder was by strangulation followed by burning of the body by petrol. The murder took place on 24 April 2012 and the body was found by Raigad police on May 23, he said.
Maria also said that Khanna is an accused in the case.
A shocked Peter Mukerjea said he had believed that the deceased was Indrani's sister and not her daughter while Mikhail said Sheena was the daughter and not the sister of Indrani.
"I have no doubt my mother Indrani killed my sister Sheena Bora," he said, claiming to know the "exact reason" but would not reveal it until his mother confesses to it. His statement came amid reports that Sheena and Peter's son Rahul through his earlier marriage had been dating each other and Indrani was opposed to it.
Intriguing claims came to light that Indrani had introduced her daughter and son to people as sister and brother. After the murder, she is also said to have claimed that Sheena had gone to the US for higher studies.
Indrani was arrested by Khar Police on Tuesday over her alleged role in the murder of Sheena in 2012.
Peter said he would cooperate with investigators in the probe. "I have never experienced anything like this before. The news I am getting, the kind of crime that has been committed, I would have never expected. Whatever help, information, police need, I am happy to help them with that. I would be absolutely clear and straight with them and cooperate."
"I don't understand at all with regard to my wife... Sheena Bora is her sister, I believed all these years, and now I am being told that she was her daughter. Whom I thought was her brother, is now her son from an earlier marriage, which I was not aware of. I was aware of one marriage and not so many others. So, now there are number of things that are appearing to me which are completely new to me," he added.
A police officer, who is privy to the probe, told PTI on condition of anonymity "Indrani's driver had told the police that it was she who killed Sheena and was present at the murder spot."
He, however, said it was still not clear whether the plan was to kill Sheena, 24, in Raigad or any other place. According to Maria, on August 21, Khar police had arrested Indrani's driver in connection with an Arms Act case, adding he confessed to the murder and was taken to the murder spot.
Mumbai police also summoned Peter's brother Gautam Mukerjea.
After her arrest on Tuesday, Indrani was produced before Bandra Metropolitan Magistrate court, which remanded her in police custody till August 31.
Sheena was kidnapped from outside the National College in western suburbs. She came here from Assam in 1990s along with Indrani and completed BA Economics from St Xavier's College. In 2011, she got a job with Reliance Mumbai Metro but suddenly stopped coming to duty, police said. In the same year, her Facebook account was deactivated.
Police had unearthed remains of a decomposed body three years ago after villagers at Gagode in Pen tehsil complained of foul odour emanating from the area.
Peter said he was unaware that Sheena went missing. "(Sheena's disappearance) is something I am finding out now. I was told that Sheena has gone to the US (United States). I am not on Facebook, but I was shown these pictures of Los Angeles or wherever she was. I didn't have her contact number. My son had told me 'see, something is not right', but I said her parents may not be happy with it, so she might have moved to the US... that I told him... He (Peter's son) didn't talk to me then."
Speaking in Guwahati, Mikhail said he had not heard from his sister since February 2012 and whenever he inquired with his mother she used to say Sheena was in the US.
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