Tehsildar Alok Verma was caught receiving the sum from one VP Singh for an undue favour, Lokayukta Inspector Shailendra Govil said.
He said that accused had demanded Rs 70,000 from Singh for allowing him to continue keeping his stall in the tehsil premises.
Singh lodged a complaint with Lokayukta police who in turn laid a trap and arrested Verma accepting Rs 20,000- the first installment of bribe at his tehsil office.
The tehsildar has been booked under prevention of corruption act and further investigations are on, Govil added.