New Delhi, Nov 17 (PTI) The CBI has arrested a divisional railway manager of the East Coast Railway for allegedly taking a bribe of Rs 25 lakh from the owner of a private company, officials said on Sunday.

They said Saurabh Prasad was arrested in Mumbai on Saturday.

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Prasad, a 1991-batch officer of the Indian Railway Service of Mechanical Engineering posted in Visakhapatnam as the divisional railway manager of Waltair Division, was allegedly taking the bribe from Sanil Rathod, proprietor of Mumbai-based D N Marketing, in exchange for reducing the penalty for under-performance in contracts awarded by the East Coast Railways and the clearance of bills worth Rs 3.17 crore.

The contracts were executed by DN Marketing and Pune-based HRK Solutions Pvt Ltd, which was controlled by one Anand Bhagat.

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The CBI said it has also arrested Rathod and Bhagat.

Following the arrests, the CBI conducted searches at 11 places in Mumbai, Visakhapatnam, Pune, Vadodara and Kolkata.

The search at Prasad's residence in Mumbai continued on Sunday as three almirahs were locked and the keys were not available.

"During ongoing searches, CBI has so far recovered a cash of Rs 87.6 lakh (approximately) along with jewellery worth about Rs 72 lakh, property documents, locker keys etc," a CBI spokesperson said in a statement.

Several incriminating documents, including investments made for a flat at Kalyan, a locker key and bank balances of Prasad, were found, the agency said.

The bribe was allegedly paid as "a reward" for reducing the penalty imposed for under-performance in a contract awarded by the East Coast Railways which was being executed by the companies owned by Rathod and Bhagat, the agency said.

"It was also alleged that bills amounting to Rs 3.17 crore raised by a private company were pending with the East Coast Railway, Visakhapatnam. However, because of delays in execution of the contract, the said company faced imposition of hefty penalty," the CBI spokesperson said in the statement.

Rathod and Bhagat allegedly approached Prasad, who demanded a bribe of Rs 25 lakh to get the penalty amount reduced.

"It was also alleged that after the intervention of the accused DRM in the matter, a reduced penalty was imposed and the bill of the private company was cleared. Pursuant to clearance of bill, said accused proprietor (Rathod) of Mumbai-based private firm arranged to pay the agreed bribe of Rs 25 lakh to accused DRM during his visit to Mumbai on November 16," the spokesperson said.

The CBI laid a trap and caught the DRM and the proprietor of the Mumbai-based private firm during the exchange of undue advantage of Rs 25 lakh, he said.

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