The article was published in a local newspaper which said that the incident had taken place four months ago.
In his defence, Halappa said that the report was a conspiracy to malign him. He said that he would not let his party's image be tainted by the report.
Meanwhile, the BJP said that the sex scandal is an attempt by the opposition to harm the party's image ahead of the Gram Panchayat Election.
The resignation has not been accepted yet as Chief Minister B S Yeddyurappa is out of the state.