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Pavoor Gram Panchayat member Abdul Khader Rizwan, 28, of Malarmane in Akshar Nagar, was arrested, police said.
The victim in the case had been accused in a robbery case in Surathkal Police station in December 2021. Two men approached the man and assured to get him out of the case and off the police radar and demanded Rs 3 lakhs for it. They had extorted rs 2.95 lakhs from the man in phases.
The man later came to know that police were searching for him and got anticipatory bail from a local court.
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The victim later lodged a complaint with the Pandeshwar police.
Meanwhile, police are on the lookout for the second accused in the case who has been absconding.