Police sources said cash found was meant for use in Ramesh Kadam's poll bid in Mohol seat.
A sub-inspector was dismissed from service and four constables suspended for allegedly facilitating the visit of a jailed NCP MLA to a flat in Thane in Maharashtra on Friday, three days ahead of the polling, where Rs 53.46 lakh was stashed, an officer said on Sunday.
Ramesh Kadam, NCP MLA from Mohol in Solapur who is fighting the October 21 Assembly polls as an Independent candidate, is lodged in Thane Central Jail for his alleged role in irregularities to the tune of Rs 150 crore in state- run Annabhau Sathe Development Corporation (ASDC).
Mr Kadam visited a friend's flat in Ghodbunder Road area on Friday evening while being brought back to Thane Central Jail after a medical check-up in Mumbai's JJ Hospital by a team of Thane policemen.
After getting information of the unauthorised visit of the MLA to the flat, Thane police raided it and found Rs 53.46 lakh cash besides Kadam, his friend Raju Khare, and the escort team there.
"Sub-Inspector Rohidas Pawar has been dismissed from service under Section 311(2) of the Constitution of India for dereliction of duty. Four constables have been suspended and departmental inquiry initiated against them," senior police official Sanjay Yenpure told news agency PTI.
A police probe into the incident has found that sub-inspector Pawar had taken MLA Kadam to the flat in a private vehicle after asking the other policemen in the escort team to wait at a distance, the official said.
The police sources said the cash was meant for use in Kadam's poll bid in Mohol seat.
The Election Commission and the Income Tax department are carrying out a parallel probe into the incident.
Results of the elections will be declared on October 24.