The matter came to light after farmers in C Gopalapuram on the outskirts of Pollachi had complained about foul smell emanating from an eight-acre farm land belonging to one Manikandan a few months ago there, police said.
However, Manikandan had managed to convince them saying he was rearing white pigs and the smell could be that of it.
A group of farmers had then noticed small pits that were dug up in the farm and decided to monitor the activities of Manikandan and kept a close vigil since last night, police said.
Immediately, the farmers rushed to the spot and found medical waste and parts of human body in the bags, they said.
Though a few persons managed to escape, one Shahul Hamid was caught and handed over to police.
Hamid has been taken into custody for interrogation, and a hunt is on for Manikandan and others involved in it, police added.