A twice-decorated police officer - retired "encounter specialist" Emmanuel Samuel Amolik - was arrested on Sunday for his alleged involvement in the murder of a builder from Navi Mumbai, Sunil Kumar Loharia.

Amolik, who retired in 2011, is a two-time winner of the President's Medal and has the arrest of gangster Charles Sobhraj to his credit.

Loharia, 50, was shot and stabbed by two motorcycle-borne assailants on Saturday in front of his office in Navi Mumbai. One of the killers escaped. But the other, 35-year-old Venkatesh Shettiar, was caught red-handed. Later, the police arrested the other, 28-year-old Wajid Qureshi, from Mumbra.

"Shettiar said Amolik sent him to kill Loharia," said Raosaheb Sardesai, senior inspector of Vashi police station. The motive was a quarrel, he added.

Loharia's brother Sanjeev, however, said local businessmen were behind the murder. "My brother never had a fight with Amolik. The police will not investigate the case as they are hand-in-glove with the killers," said Sanjeev.

"We have no such information," responded Sardesai. The two men, he said, had a squabble in January, when Amolik was almost run over by Loharia's car.