Chief engineers - Ashok Pawar (57) and Uday Murudkar (54) - were held on Wednesday late evening and were produced before the court yesterday, which sent them to police custody till July 11, a senior police official said.
The two are accused of clearing bills of contractors without verifying the status of the "repaired roads" in the city, the officer said.
Both the engineers are under suspension since April this year, following a primary inquiry into the alleged scam involving shoddy work by contractors in 34 roads of south Mumbai, western and eastern suburbs, and runs into nearly Rs 354 crores.
BMC Commissioner Ajoy Mehta had suspended the two officers for their alleged failure to supervise construction of the said roads after they were found guilty prima facie by an inquiry committee of the civic body.
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Mumbai police has already arrested 22 people in this connection, all private road repair contractors, out of which 20 are out on bail.
BMC commissioner instituted an inquiry into alleged malpractices of Road Department and contractors and initiated action against them after Mumbai Mayor Snehal Ambekar drew attention of the BMC last year in October over poor road quality.