He quit as party chief when he was caught on camera while taking bribe in a sting operation by news website Tehelka in 2001.
Tehelka had released CDs showing Laxman accepting money for promise of assistance to a fictitious Britain-based company M/s West End International in securing a contract for the supply of thermal imagers to the Indian Army.
The scribes of the portal had posed as representatives of a fictitious UK-based company West End International and sought Laxman’s recommendation to the ministry for supply of "hand-held thermal imagers", a fictitious device, for the Indian Army.
A special CBI court April 27, 2012 sentenced Laxman to four years in prison. He was arrested and sent to jail. In October the same year, the Delhi high court granted bail to Laxman on medical grounds.