Jail sentry Arvind Tatwal was caught while allegedly handing over drugs to a prisoner on Wednesday, Jailor Manoj Jaiswal said.
After seizing about five grams of brown sugar from Tatwal, Mhow Police registered a case against him under the Narcotic Drugs and Psychotropic Substances Act and arrested him.
Arvind was earlier transferred to Ratlam after complaints by people that he allegedly demanded money for allowing them to meet their jailed relatives, Jaiswal said.
He was transferred to Mhow Jail recently and was to appear for the jailor's exam on May 23.