A threat letter along with a hand grenade was found at a contractor's house in Manipur's Imphal East district on Sunday, triggering panic in the neighbourhood, the police said.
The grenade was kept at the gate of the house of Thokchom Shankar, 52, in Kairang Makha Leikai Lane 3 in Heingang police station area, they said.
The note accompanying it asked if Mr Thokchom could save the lives of his family members, the police said.
The police took the grenade and started an investigation.
Extortion is suspected to be the cause of the threat, the police said, adding they were yet to identify those behind it.
Residents staged a protest at Singjamei in Imphal West district over a similar incident. On December 12, a bomb was left at a house in the area.
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