Vigilance sources said the absconding officer was arrested in connection with the case registered against him and nine others, including revenue officers for allegedly selling prime government land to private individuals.
They, however, declined to reveal the place from where the former Deputy Commissioner was arrested.
Punjab and Haryana High Court on Wednesday rejected Garg's petition seeking quashing of the FIR registered against him on November 9 last year, saying he had no role to play in the land sale deed.
The trial court had found that the officials had executed the land sale deed worth Rs 250 crore for just Rs 6.3 crore.
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Garg and four revenue officials were suspended on May 8, 2012 by the Punjab government.
The bureau had registered a case against Garg, four former revenue officials of Patiala, and five private individuals for the "fraudulent sale" of government land in October last year.
The PVB had approached a trial court here recently for declaring Garg a proclaimed offender as he was evading arrest and had failed to join the investigation.