He was arrested at Sundarakottai near Mannargudi in Tiruvarur district, police said.
Police said a team led by DSP Anbazhagan arrested Divakaran, considered a strong man and close to AIADMK top circle.
Police said they had received some complaints relating to land grabbing by Divakaran.
Divakaran was on bail after his arrest in a case relating to the alleged demolition of a hut in Tiruvarur district in February last year.
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