Brig Bikas Ranjan Daschaudhary, joint general manager of CSD and Milind Govilkar, director of Sankalp Consumer Products were arrested by the anti-corruption bureau of CBI today.
According to CBI, Daschaudhary was caught red-handed accepting illegal gratification of Rs 1.25 lakh from Govilkar.
"The private company unauthorisedly acted as a marketing arm and representative of other companies. Govilkar in connivance with officials of CSD manipulated various demands of CSD items in favour of clients of Sankalp," CBI said in a statement released here.
According to the agency, Sankalp was favoured by CSD officials at various stages such as introduction of new items, price revision and budget allocation.
CSD operates from its head office in Mumbai and has depots all over India to provide consumer goods to serving and retired personnel for army, navy and air force at a concessional price.
"Searches were conducted at 20 places all over the country at the official and residential premises of the accused and the suspected officials. During the search, incriminating documents, huge cash and jewellery were recovered," the agency said.