"I don't believe in horse-trading; neither have I done that, and the results are in front of you," Mr Ahluwalia said after he failed to retain his seat.
The Congress and the Jharkhand Mukti Morcha (JMM) won one seat each, while the ruling BJP faced a humiliating defeat in the elections for two seats from the state. Mr Ahluwalia finished third with 20 votes while Congress' Pradip Kumar Balmuchu secured 25 votes. The JMM's Sanjeev Kumar bagged 23.
The JMM had earlier asked the BJP to withdraw its candidate in favour Sanjeev Kumar but the latter rejected the call.
A total of 68 votes were polled in the 82-member state assembly. Eleven members of Jharkhand Vikas Morcha (Prajatantrik) and the lone MLA of CPI (ML-Liberation) abstained from voting.
The BJP heads the ruling coalition in Jharkhand with the JMM. Both parties have 18 MLAs each. Today's defeat raises serious questions about the stability of the Arjun Munda government. The Chief Minister responded to today's result, saying, "People select candidates who care about their welfare and that of the state and the country".
Today's Rajya Sabha poll was rescheduled after it was countermanded on March 31 in the wake of allegations use of money power and horse-trading which the Election Commission said had "vitiated" the electoral process to the upper house in the state. Rs. 2.15 crore was seized from the car of a relative of an independent candidate R K Agarwal.
Mr Ahluwalia was denied nomination by BJP in the earlier round of Rajya Sabha elections when about 50 seats had been decided and he was fielded only after the countermanding of the poll in Jharkhand.