Deputy Commissioner of Police Rajinder Singh told reporters that the victim’s friend and business partner, Baldev Singh Deol, and his partner’s driver strangled Mr Power at Anandpur Sahib in Ropar district, some 80 km from Chandigarh.

Rajinder Singh, who is based in Jalandhar town, said the crime was committed on May 8 when Mr Power landed in India and was last seen in Amritsar.

The body of Mr Power, who was on a business trip to India, was later thrown in the Bhakra canal in Ropar.

After allegedly committing the crime, Mr Doel returned to Britain on May 15, said the police officer.

“We are yet to recover the body,” he said.

On being asked about the recovery of a body from a forest near Anandpur Sahib, he said: “We have also got the information. I cross-checked and it was a different body.”

Based on the interrogation of driver Sukhdev Singh, who is also Mr Deol’s nephew, police said they have unearthed incriminating evidence relating to the crime.

“We will seek police remand of Sukhdev Singh and initiate extradition of Deol from Britain,” he said.

He said the car used in the crime has been recovered.

“The victim’s two briefcases and two handbags are yet to be recovered. As per the interrogation, they are lying in Sukhdev Singh’s flat in Jalandhar.”

Both Sukhdev Singh and Mr Deol were booked under section 302 (punishment for murder) and section 365 (kidnapping or abducting) of the Indian Penal Code.

A property dispute is believed to be the cause of the crime.

Earlier, a kidnapping case had been registered by the Jalandhar police against Mr Deol on the complaint of the Wolverhampton hotelier’s brother Amrik Singh, who resides in Jalandhar.

Mr Power, 54, who owns a four-star Hotel in Wolverhampton, had come to India for a business deal, claimed his family, who had announced a reward of 25,000 pounds for providing information about his whereabouts.

State Congress leader Sukhpal Singh Khaira had sought the intervention of Chief Minister Parkash Singh Badal in the case.

“The NRI community is deeply concerned over Power’s abduction,” he said.