A BJP corporator from Thane in Maharashtra was arrested on Monday in the 2015 case of extorting money from a local builder, police said.
The accused, Narayan Pawar, was booked in December 2015 along with three others when he was with the Congress.
In his FIR, the builder R G Pataskar had claimed that he had purchased a plot from one of the accused persons, Siddimian Sheikh, in 1997.
However, Sheikh and two others forged documents to claim that they had purchased the plot from the builder, a police official said.
"The builder claimed that he was threatened to pay Rs 3 crore to Pawar to get the plot back in his possession, following which a case was registered against Pawar, Sheikh, Ramrao Gurala and Pradip Burke," she said.
The official said the builder had paid Rs 3 lakh to the accused.
He said Pawar was booked after the police opened up cases against some corporators for harassing builders, in the wake of the suicide committed by Cosmos Group builder Suraj Parmar in October, 2015.
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