Acting on a tip-off, police arrested the duo yesterday near a petrol pump on the Gwalior road and recovered 175 gms heroin from their possession, police said.
The accused were identified as Pradeep Sharma (ex-Army man) and Ashish Bhadoria, police said.
City Superintendent of Police K D Sonakia said Pradeep had joined Army in 2000 and was posted in Jammu in 2007 when, while taking part in a search operation along with a fellow personnel, they seized some drugs from a person but did not inform about it to their superiors.
Later, Pradeep came to his native village Bhadakur on leave and did not go back to rejoin duties, following which he was sacked.
A case under NDPS Act was registered against them and further probe was underway, police added.