Yadav, who was expelled from RJD, a major constituent of the alliance government in the state, told newsmen that gangster Santosh Jha enjoyed patronage of Sanjay and had helped him in Lok Sabha polls in Darbhanga last year.
The Madhepura MP demanded a CBI inquiry into the murder, which has triggered criticism of the Nitish Kumar government, to "bring out the truth as to why the state government was being soft on Santosh Jha."
To buttress his point, Yadav pointed to a footage shown on some TV channels of Sanjay Jha with Munni Devi, sister of Santosh Jha and chief of Baheri panchayat.
Sanjay, a former JD(U) MLC, had unsuccessfully contested Parliamentary election from Darbhanga in 2014.
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He reacted angrily to the charges made against him by Yadav and denied any link with the gangster and his family.
"I am prepared for any probe, including that by CBI in this connection. Munni Devi and his brother-in-law Sanjay Laldeo, with whom I am shown, had actually come to me as part of a delegation with a demand to provide EBC status to their Deohar caste instead of OBC status.
Denying proximity either with gangster or his sister, Sanjay said the same Munni Devi and Sanjay Laldeo had shared dias with former chief minister Jitan Ram Manjhi when he had gone to address a rally of his Hindustani Awam Morcha in Darbhanga in April this year after climbing down from the CM's chair.
Launching a scathing attack against Yadav, he said, "There shall be no low standard politics over a painful issue of murder ... Moreover such allegations coming from a man regarded as symbol of fear does not sound nice."
Close on the heels of the Darbhanga murder, another engineer was found dead with injury marks on his body in Vaishali district on Monday.