The body of a man tied and packed in a sack was found at Pothuvacherry in Kannur on Monday.
The police have identified the victim as Prajeesh, 33, who went missing two days ago. A missing case was filed at the Chakkarakkal police station.
The body was found by locals in a canal at Pothuvacherry. They informed the Edakkad police, who with the support of the Fire and Rescue Services personnel fished out the body.
The Chakkarakkal police have taken into custody a 40-year-old man named Prashanth and are searching for another person named Shukur, suspected to have been involved in the murder.
Prajeesh had been questioned by the police in a case related to the theft of teak wood, costing ₹3 lakh, kept in a house under construction. During questioning, he had reportedly revealed the name of Shukur.
The police said they received information about the death of Prajeesh after they took Prashanth into custody for questioning. They suspect that Prajeesh was killed while he was in an inebriated condition.