BJP leader Ram Patkar, the former president of the Kulgaon-Badlapur Municipal Council, was among the 18 persons against whom an offence of alleged fraud and cheating was registered following a complaint by a man, Badlapur (East) police inspector Vijay Bagal said, adding that other arrests would follow soon.
During the tenure of Patkar, a proposal of constructing a new administrative building for the Council was mooted, as the present building was insufficient, he said.
Accordingly, an advertisement was issued in the papers calling for tenders from various agencies.
Thus, they allegedly selected the contractor of their own choice and gave the contract of Rs 150 crore work to him.
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Based on the complaint, police registered the offence and started investigations and arrested the duo - Patkar and former corporator Milind Narvekar (BJP) - yesterday.
The duo was presented before the holiday magistrate at Chopda court yesterday who remanded them in police custody for seven days.
The two arrested and others accused at large have been booked under various sections of IPC, including section 420 (cheating), police added.