The deputy engineer, identified as Girishkumar Parikh (57), is attached to Karjat unit of PWD in Raigad district.
"Parikh had allegedly sought Rs 25,000 from the hotelier for allowing him to put up banner of his hotel on a road in Karjat," said ACB SP Sandeep Karnik.
Parikh was held when he was accepting Rs 20,000 from the complainant at the Sub-Division Office.
He is booked under the provisions of the Prevention of Corruption Act by Karjat police.
