Nawa Sihala Urumaya Leader Sarath Manamedra is being investigated over charges that he had sold his pistol to a businessman at Pagoda in Nugegoda, the Mirihana police said.
The pistol had been issued to him by the government at the time when he was a presidential candidate in 2010.
Police said the weapon had been allegedly sold for Rs.52, 000.
They had asked Mr. Manamedra to report to the Mirihana police station after the businessman was arrested but he had failed to do so and had also switched off his mobile phone.
The police said they were on the lookout to arrest him.
They said the businessman was arrested and two rounds of ammunition seized after receiving a tip off from some people who had seen him loitering in the area and brandishing a revolver.
The businessman had admitted that the revolver was sold to him by Mr. Manamendra. (Supun Dias)