Deputy Superintendent of Police Sandeep Karnik told PTI that Vandana Ramdas Chakre (50), the ward committee chairperson, had demanded Rs 7 lakh from the complainant for speeding up removal of encroachment on his plot of land.
The amount was later negotiated down to Rs 2 lakh, after which he approached the ACB.
The Thane ACB unit laid a trap at the office of the Ward Committee Chairperson and arrested Chakre while accepting Rs 2 lakh from the complainant this afternoon, Karnik said.