The BJP said the police was acting at the behest of the ruling party.
The three men, who were detained in Telangana for allegedly trying to poach the MLAs of Chief Minister K Chandrashekhar Rao's TRS, walked out free late last evening after a court turned down a police plea seeking their custody.
The court, citing lack of evidence, asked the police to question the accused, reportedly linked to the BJP, by issuing them notices under Section 41 that allows cops to arrest the accused without a warrant.
The accused were arrested from a farmhouse near Hyderabad on Wednesday night. Police said they were caught in the act of bribing four MLAs of TRS to switch to the BJP.
The police claimed that one of the MLAs, Pilot Rohit Reddy - who owns the farmhouse - tipped the police off about the "deal".
A First Information Report or FIR was then registered based on Mr Reddy's complaint that alleges that 250 crore was on the table for four MLAs.
The MLAs called the police, saying they were being "lured and bribed to change parties", Telangana police chief Stephen Raveendra told NDTV. "They said they were offered big money, contracts and posts to switch parties," he said.
If they didn't join the BJP, "there will be criminal cases and raids by ED (Enforcement Directorate)/CBI and the Telangana Government led by TRS party will be toppled," the FIR by Rohit Reddy said.
The BJP, however, denied the allegation and accused the TRS of staging a drama "scripted, directed and produced" by the Chief Minister.
BJP State general secretary, Gujjula Premendar Reddy, moved the high court seeking the transfer of the case to the CBI, calling it a conspiracy by the TRS to defame his party.
He also said that the police was acting at the behest of the ruling party.
Union Minister Kishen Reddy, a senior Telangana BJP leader, said there was "no reason" for them to offer astronomical amounts for four MLAs when the ruling party (TRS) has a comfortable majority
The TRS has raised "Operation Lotus" allegations since 2019.
"Operation Lotus" is the term used by the opposition to describe the alleged bribing of ruling party MLAs by the BJP to topple governments in various states.