A CBI spokesperson said the engineer was caught "red- handed" while receiving the bribe from the contractor.
"A case was registered on a complaint alleging that the divisional engineer was harassing the complainant and was not entering the measurement of work completed by him as a result of which the payment towards the work already carried out by him was not being processed," the spokesperson said.
She said the accused demanded a bribe of Rs 2.80 lakh for passing the pending bills of the complainant and agreed to accept a sum of Rs one lakh.