Gurvinder Singh, 32, was arrested from the spot, said police. He was driving the Tata Indica car, DL 7C E4549, which hit the senior Bharatiya Janata Party leader's Maruti Suzuki SX4 DL 8C BF0034 on the side he was sitting.
"We are investigating whether he (Gurvinder Singh) jumped the red light in the morning," Joint Police Commissioner M.K. Meena told IANS.
Later, Additional Commissioner of Police S.B.S Tyagi said it "apparently looked Singh jumped the red light".
A resident of Mehrauli area in south Delhi, Gurvinder Singh works as a driver in a hotel. He was on his way to work when his car hit Munde's vehicle at Aurobindo Chowk in Delhi around 6.20 a.m, sources said. The hotel, however, issued a clarification that he was not on duty of the hotel in any manner.
A native of Punjab's Hoshiarpur, he lives with his younger brother in a rented accommodation.
Informed sources said that Singh himself made a call to the Police Control Room (PCR) and informed that his car was hit by a red-beacon SX4.
Sources also said that he kept waiting for the PCR van to come, while in the meantime, Munde's personal security and driver took the minister to AIIMS.
Ashok Gujjar, friend of Gurvinder Singh, told IANS: "I was at Janpath when I got to know about the accident, and immediately rushed to a police station. He is not a bad driver and will never jump red lights."
Gujjar said his friend was a seasoned driver and drove cars like Mercedes and Ford Endeavour.
Police registered a case against the arrested driver of rash and negligent driving, causing death.
According to sources, Gurvinder Singh was also questioned by Intelligence Bureau officials considering the "sensitive nature" of the case.
He was later presented in a local court, which granted him bail.
Metropolitan Magistrate Puneet Pahwa granted bail to Gurvinder Singh, saying the case falls under a bailable offence and declined the police plea seeking 14 days' judicial custody of the accused.
Police told the court that the Special Cell and Intelligence Bureau (IB) are investigating to find out any possible conspiracy behind the incident and Gurvinder's custody is required.
On this, the court said that if any conspiracy is unearthed, the police can seek the custody of the accused then.
The court asked Gurvinder to furnish a personal bond of Rs.30,000 and a surety of like amount.