Vigilance officials said Inspector Hareram Sah had demanded Rs 30,000 from a person for stopping the construction work by his opposite party on a controversial piece of land.
Sah later agreed to bring down the bribe amount to Rs 20,000 after bargaining, they said.
The officials said that a trap was laid under the leadership of DSP Ram Pukar Singh, who arrested Sah while taking the graft amount at his residential quarters within the premises of the police station.