New Delhi, Feb. 8 -- The arrest of Dhruv Dutt Sharma, the man behind Gurugram's well-known 32nd Avenue commercial hub, has triggered serious questions about investor safety and regulatory oversight in India's commercial real estate sector.

Gurugram Police on Friday arrested Sharma in connection with an alleged large-scale cheating operation in which a single floor of a commercial building was reportedly sold to more than 25 buyers. Investigators estimate the total amount involved across complaints could be close to Rs.500 crore, according to police statements.

Sharma, a director of 32nd Milestone (also known as 32nd Avenue), was produced before a city court and remanded to six days of police custody. The case is being probed by the Econ...