The action, however, likely to causes a storm in the state Assembly which is scheduled to start its Winter Session from Tuesday.
Coming down heavily on the land mafia the police on Monday booked Vijay Shrivastava for allegedly encroaching government land and selling it to different parties.
"An FIR has been registered against him for opening fire upon persons who had complained against him. A blank cartridge was also recovered from him," the police said.
Deputy Inspector General of Police Irshad Wali said: "A police inspector, M.L. Bhati, was colluding with Shrivastava and refusing to accept complaints against him in the fire incident".
Shrivastava was also involved in extorting money from senior citizens in the area, Wali said.
"The land encroached by Shrivastava is being vacated," the DIG said.
The Lokayukta police is taking action against Shrivastava and the revenue officials who allowed him to grab the land. Shrivastava also allegedly helped many persons to acquire loans from the Life Insurance Corporation on the unauthorised land.
Besides, teams of the Bhopal Municipal Corporation (BMC) and police removed many commercial eateries that were set up on the prime government land in Kerwa and Neelbad areas.
The action was taken following Chief Minister Kamal Nath's orders for a crackdown against mafia active in the state in various fields. The four upmarket restaurants that were bulldozed were Nature cottage Café restaurant Lounge, Country side, 32 Degree and Vogue.
Protest were also sparked against the government action on Sunday that continued on Monday as well.
The corporators in Bhopal protested after the house of an alleged land mafia Mukhtar Malik located at Shyamla hills was seized by the BMC on Sunday. The protesters alleged that the action against Malik was a conspiracy by his political rivals.
Heavy police force was also deployed to support the civic authorities for removing encroachments. Senior civic officials were also present until evening.
Another key landmark Sakshi dhaba survived action by the demolition squad that is owned by BJP leader Krishnakant Chaurasia. The owner said he had acquired a stay order from the court on the land that is under dispute.
BMC officer Kamal Solanki said: "The anti-encroachment drive is underway around the city". He said the area where illegal buildings and restaurants are built are identified and action will be taken.
( With inputs from IANS )