Police said "We have arrested the terrorist"
Indirect Speech/Reported Speech.
a) Police said they have arrested the terrorist
b) Police said they had arrested the terrorist
In indirect/Reported speech we use the past tense. This is to describe an incident that happened in the past. But I read some news where the reporter has used have arrested instead of had arrested.
Please help me to understand when to use sentence a) and b) in reported speech? According to me sentence b) is incorrect.