Two senior IAS officers, Mr Pradeep Vyas and Mr Jairaj Phatak, have been placed under suspension pending investigation in the Adarsh Housing Society scam, the Maharashtra government lawyer informed the Bombay High Court on Thursday.
Mr Vyas was arrested by the CBI on Wednesday evening.
Mr Phatak is one of the most senior IAS officers in Maharashtra. According to sources in the State Secretariat, before the Adarsh scam broke, he was a contender for the Chief Secretary's position.
It was during the tenure of Mr Vyas, who was the Collector of Mumbai, and Mr Pathak, who was the Municipal Commissioner of the city, that the high-profile Adarsh housing project was cleared in the upmarket Colaba area.
Adarsh was originally meant to be a housing project for Kargil war veterans and widows. However, its scope was diluted to include civilians, especially politicians and bureaucrats.
According to the CBI, Mr Vyas in his capacity as Collector from August 2002 to May 2005, allegedly conspired with other accused promoters and accepted false documents as proof of income and granted membership to those who were not eligible. His wife, who is also an IAS officer, received a flat in the Adarsh building.
Mr Phatak is alleged to have allowed the height of the building to be raised beyond 100 metres without the approval of the High Rise Committee of the Mumbai Municipal Corporation. His son also received a flat in the building.
Meanwhile, the Bombay High Court has also asked the members of the Adarsh Society to realise their mistake and surrender the controversial building to the Ministry of Defence. It said that the building was a security risk.