It is hard to believe the UPA government was completely innocent, as it maintains. Whatever Jayalalitha's and Karunanidhi's role in the event, it is difficult to imagine anyone taking a drastic step without informing Shivraj Patil, the Home Minister. For instance, if there were a serious law-and-order problem arising from the arrest, then it would be an excuse/reason to immediately bring down the Jayalalitha government and impose central rule under article 356, and Jayalalitha is well aware of this. Karunanidhi, of course, enjoys considerable clout at the center, comparable to what Chandrababu Naidu enjoyed with the NDA government.
Arjun Singh, Prime Minister-in-waiting and rabidly anti-Hindu, has finished most of his re-toxifying work, and so has had a little time on his hands. He may had input into this, too.