Mahant Narendra Giri, the president of Akhil Bharatiya Akhada Parishad, was found dead on Monday at Baghambari Muth in Allahabad, police said.
The Parishad is the largest organisation of sadhus in India.
According to Inspector General of Police K P Singh, Mahant Giri's body was found hanging from the ceiling by his disciples.
A purported suicide note of seven-eight pages was also found at the site in which the seer had written that he was mentally disturbed and was ending his life.
The seer had written he was upset with one of his disciples, the police said.
Later, Anand Giri, a disciple of the deceased ABAP president who was named in the purported suicide note, was taken into custody.
"We are recording statements. The field unit is collecting forensic evidence. The body will be sent for post mortem tomorrow. We will be taking action based on the findings. No arrest has been made as of now," Prayagraj's Additional Director General (ADG) Prem Prakash said.
"Anand Giri has been taken to Uttar Pradesh by the state police as to it was their matter," Haridwar SP City Kamlesh Upadhyay said.
Anand Giri termed the allegation as 'conspiracy'.
"It is a big conspiracy by people who used to extort money from Guruji and wrote my name in the letter. It needs to be investigated as guru Ji has not written a letter in his life and could not do suicide. His handwriting needs to be probed," he said.
Mahant Narendra Giri had also delegated various responsibilities to his disciples in the note, the police said.
The IGP said that police had received a call at 5.30 pm from the Muth that the seer had hanged himself and added that his body was found at the guest house where he lived during the day.
Prima facie it appeared to be a case of suicide but things will be clearer after the post-mortem and forensic tests, the police said.
Singh said a decision will be taken on the last rites of the seer after the arrival of office bearers of the Akhara Parishad.
The sadhu had also talked about the construction of a 'samadhi' in the suicide note, he said, adding the decision on it will also be taken by the Akhara Parishad's office bearers.
The IGP said information about the seer's death was shared with the chief minister's office.
The influential Hindu seer was hospitalised in April after he tested positive from COVID-19.
Several political and religious leaders condoled his demise.
Prime Minister Narendra Modi condoled the death, saying the mahant played an important role in bringing together different streams of seer bodies while remaining dedicated to spiritual traditions.
His demise is extremely painful, Modi tweeted.
'The death of Mahant Narendra Giri ji, President of Akhil Bharatiya Akhara Parishad, is an irreparable loss to the spiritual world. I pray to Lord Shri Ram to grant the departed soul a place at his feet and strength to the bereaved followers to bear this sorrow. Om Shanti,' Uttar Pradesh Chief Minister Yogi Adityanath tweeted.
Heavy police force was deployed at the Muth from 6 pm onwards and barricades were set up in the surrounding areas.
All top officials, including the divisional commissioner, the district magistrate, IG, SSP, were present at the Muth.
-- with ANI inputs