Contractor Balbir Singh of Naraingarh had filed a complaint with the vigilance Bureau against executive engineer R K Gupta alleging that he demanded Rs 40,000 from him for passing the balance payment of his bill.
A VB team raided the office and caught the engineer red-handed while he was taking the bribe, a VB official said.
However, Gupta refuted the charges claiming that no payment of the contractor was due with the department.
Gupta said the contractor has made false charges against him as he had imposed penalty on him.
The contractor was awarded the contract of Rs 25 lakh for constructing a stone bund on the bank of a river at Naraingarh.