Diwakar, posted as Chief Executive Officer of Zila Parishad of Banswara, was arrested last night in the case after initial interrogation, Additional SP ACB Bajrang Singh said.
He was produced before the ACB court where the Magistrate sent him to 14-day judicial custody, the officer said.
The bureau had also summoned retired IAS officer GS Sandhi in connection with the case, but he did not turn up despite being served with repeated notices.
During the probe, name of Sandhu, who was additional chief secretary (UDH) at that time, surfaced after which the bureau issued notices to him but he did not turn up, the officer said.
Diwakar was posted as deputy secretary in the UDH department when the alleged irregularity took place.
Besides, the ACB also sent notices to another RAS officer Onkar Saini, allegedly involved in the case, to appear before it for interrogation but he also did not come.