BJP MLC Tunna Ji Pandey was arrested on the basis of a written complaint by the parents of the 12-year-old girl following the alleged incident on Howrah-Gorakhpur Poorvanchal Express, Superintendent of Railway Police (SRP), Muzaffarpur, B N Jha said.
The parents alleged that Mr Pandey kissed their daughter in an AC-2 tier coach at around 3 AM and asked her to come to the toilet with him when the train was near Sarai station close to Hajipur junction.
The frightened girl raised an alarm following which the parents, who had their berths elsewhere in the compartment, rushed to her, Jha said.
The MLC was caught by the escort party on board the train and he was handed over to GRP in Hajipur.
He was booked under IPC 354 A (demand or request for sexual favours) and sections of the Protection of Children from Sexual Offences (POCSO) Act, 2012, the SP said.
The legislator was later remanded to 14 days' judicial custody by CJM Vaishali, Jairam Prasad.
Mr Pandey, however, denied the charge, saying the girl shouted when he switched on the light to remove his mobile phone charger from soket.
Talking to reporters at the GRP police station, Pandey said he had told the girl's parents that since he had to get down at Hajipur he was removing his mobile charger from the plug and for that he switched on the light.
Facing embarrassment five days before the Monsoon session of the Bihar Legislature begins, BJP suspended Mr Pandey.
"BJP has suspended party MLC Tunna Pandey," senior BJP leader Sushil Kumar Modi said in a tweet.
The victim family was travelling from Howrah to Gorakhpur in Uttar Pradesh, while Pandey, who is in liquor trade, had a ticket from Duragapur to Hajipur.
Pandey is BJP MLC from local bodies quota in Siwan. The incident provided an opportunity to ruling JD(U) to attack its rival saffron party.
JD(U) MLC and party's chief spokesman Sanjay Singh condemned the incident and said, "We are waiting to see what action BJP takes against its MLC in the case."
His party colleague and spokesman Neeraj Kumar said the incident has exposed the "real face" of BJP and put a serious question over its high moral ground.
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