"A case of financial bungling to the tune of Rs 20 lakh has been registered against Madhavi Shah, president of Harrai Nagar Parishad, along with other officers," Superintendent of Police (SP) Gaurav Tiwari informed today.
Madhavi is also the wife of Congress MLA from Amarwara - Kamlesh Shah.
Tiwari informed that Chief Municipal Officer (CMO) of Harrai Nagar Panchayat Rajendra Singh and two other employees Ghanshyam Yadav and Rahul Yadav were also booked in this case.
This amount was paid from the government account through this cheque, the police added.
During inquiry, signatures of Shah were also found on the documents/cheque.
Tiwari said a case of forgery was registered under relevant sections of IPC against Shah and the officials concerned.
Shah however denied the charges and claimed that she was not having powers to sign a cheque or withdraw it.
"I am being implicated. I want a fair inquiry into the matter as the President of the Nagar Parishad doesn't have financial powers. Only CMO can disburse the amount from the official accounts," she added.
Tiwari had assumed the charge as Chhindwara SP during last week after being transferred from Katni.
As Katni SP, Tiwari had exposed a money laundering case worth Rs 500-crore allegedly involving a minister in state cabinet.
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