The police alleged that Singh ordered his men, armed with sophisticated weapons, to waylay a consignment of smuggled gold biscuits in the southern outskirts of Aizawl city on the night of December 14 last year.
The incident came to light when driver of the vehicle Lalnunfela filed an FIR at the Aizawl police station on April 21 alleging his vehicle was waylaid by armed people from the 39 Assam Rifles who decamped with 52 gold biscuits worth Rs 14.5 crore.
The eight Assam Rifles jawans, accused of participating in the dacoity on December 14 last and now in custody, reportedly told their interrogators that they committed the crime after receiving orders from the battalion Commandant.
Singh, through his lawyer, today applied for an anticipatory bail, which was rejected by the Aizawl District and Sessions Judge Lucy Lalrinthari and he was arrested in the court premises.
When contacted, Brig Malhotra, refused to comment saying the matter was "sub-judice".
The police had constituted a six-member Special Investigation Team (SIT) on April 22 to investigate the matter and registered cases including dacoity, criminal conspiracy, criminal intimidation and dishonestly receiving property stolen in the commission of a dacoity.
The SIT has already arrested four people, including a former well-known student leader and a businessman on April 23 and 24, who were remanded to judicial custody.