Acting on a tip-off, the Lokayukta sleuths caught Dr Sharma when he was accepting Rs 3 lakh bribe at his house, deputy superintendent of police S S Udavat told PTI.
The CHMO had demanded a bribe of Rs five lakh from the dresser Rustam Singh Narwaria for settling a case against him on the issue of recovery of district hospital medicines at his place on September 13 following which Dr Sharma had threatened to suspend him and ordered a departmental probe against him.
Narwaria tipped-off Lokayukta police about it following which a trap was laid and Dr Sharma was caught red-handed taking Rs 3 lakh from Narwaria and his daughter at former's residence in Kasturba Nagar area, the DSP said.
He was released on bail. A case under Prevention of Corruption Act was registered against him.
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