Karimnagar ACB Deputy Superintendent T Sudershan said the complainant farmer had filed an application before Ramesh Goud, tehsildar of Rebbena mandal, for mutation of his name in revenue records.
Goud demanded Rs 2 lakh for the work and asked the farmer to pay the amount to one person named Ch Shankar, said the official.
The complainant then approached ACB with the complaint against the tehsildar.
Police arrested Shankar from the spot and the tehsildar was arrested later in the afternoon, he said.
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