"Allegations against me are far from the truth. Clear investigation is needed. I'll come out innocent and I'm confident about it. I'm resigning on moral grounds and I request you to accept this," Jarkiholi wrote in his resignation letter to Karnataka Chief Minister BS Yediyurappa.
Meanwhile, the rival party Congress' workers took to the streets in Bengaluru to stage a protest against the accused minister over the said allegations and demanded his arrest.
The controversy has come days before the Karnataka Budget session and at a time when the BJP and other parties are preparing for the by-election to the Belagavi Lok Sabha seat, which fell vacant last year after the death of BJP leader Suresh Angadi.