A sub-divisional officer, Sitansu Sekhar Nayak, an accountant Sushanta kumar Sahu and a meter reader of NESCO Golekh Sahu, were arrested yesterday and after interrogation were forwarded to court.
They were remanded to judicial custody.
The money is believed to have been collected from consumers but not deposited with the department, said sahadevkhunta police IIC Paresh Rout.