After registering the FIR, the investigating agency conducted searches on the premises of Bhandari in connection with the 2,895.63-crore deal.
Bhandari is already being investigated for allegedly buying a benami house for Congress President Rahul Gandhi's brother-in-law Robert Vadra in London.
A senior CBI official told : "A case was registered on Wednesday against Bhandari and Bimal Sarren, both directors of Offset India Solutions Pvt Ltd, as well as officials of Swiss-based plane-maker Pilatus Aircrafts Ltd over alleged irregularities in procurement of 75 basic trainer aircraft in 2009."
The CBI said the Indian Air Force on December 16, 2009 issued a request proposal for procurement of 75 basic trainer aircraft and Pilatus Aircrafts Switzerland was one of the bidders.
"To obtain the contract for supply of 75 basic trainer aircrafts to IAF, Pilatus Aircrafts entered into a criminal conspiracy with Bimal Sareen and Sanjay Bhandari by fraudulently signing a Service Provider Agreement with the latter in June 2010 in violation of the Defence Procurement Procedure 2008," the CBI alleged.
The agency further alleged that kickbacks up to Rs 339 crore were paid in the deal to influence some unknown IAF and Defence Ministry officials, who were associated with the procurement process.
From 2011 to 2015, Pilatus Aircrafts made the payment in the bank accounts of Dubai-based company Offset India Solutions FZC, belonging to Bhandari, to obtain the contract, the CBI said.
The CBI on November 11, 2016 initiated a preliminary enquiry (PE) into the deal to verify the bribery charges.
The CBI official said the agency was probing the kind of services that Offset India Solution Pvt Ltd provided to the Swiss aircraft firm.
Following the probe, the CBI filed an FIR under various provisions of the Indian Penal Code dealing with criminal conspiracy and cheating, and the Prevention of Corruption Act.
Bhandari's companies Offset India Solutions Private Limited and Dubai-based Offset India Solutions FZC, as well as his associates Himanshu Verma, Deepak Agarwal and an unknown man have also been named as accused in the case.
( With inputs from IANS )