The Himachal Pradesh High Court dismissed the bail application in a case involving the misappropriation of scholarship funds meant for SC, ST, and OBC students, citing a lack of satisfaction under Section 45 of the Prevention of Money Laundering Act ( PMLA ).
The applicants, Rajdeep Singh and Krishnan Kumar, directors of ASAMS Education Group, have been arrested under Section 19 of the PMLA by the Enforcement Directorate (ED), alleging that the multi-crore scholarships were illicitly misappropriated. It was found by the ED that the applicants created shell companies, opened bank accounts for students, and diverted scholarship money into their own accounts. The bail application filed before the Special Court, Shimla, was dismissed on 10th November, 2023.
The applicants, represented by Rajiv Chauhan, stated that they are innocent persons and have falsely been framed in the case. Even the CBI could not collect any substantial evidence to prove the accusation. Alleging bias against the ED, the applicants have sought relief of bail on the grounds mentioned in the bail applications.
It was further claimed by the applicant that they were cooperative during the investigation and questioned the existence of ‘Proceeds of Crime’ at the time of the arrest.
According to ED, the matter revolves around a scam involving the allocation of scholarships to the SC, ST, and OBC categories of students in Himachal Pradesh under the Post-Matric Scholarship Scheme. In this fraudulent activity, officials from the Department of Higher Education, along with private educational institutions and banks, were involved, which has resulted in the misappropriation of scholarship funds of more than Rs. 200 crore.
The ED argued that the offence is under investigation, and the same requires detailed investigation to unearth the material and in such circumstances, if bail is granted, it would defeat the case of the prosecution. The twin conditions, as per Section 45 of the PMLA, are also stated to be not satisfied in this case.
It is the further allegation of the ED that the applicants, with co-accused, obtained proceeds of crime worth ₹ 28,09,00,055/-, as a result of criminal activity of cheating and making false claims of students on the basis of forged affiliation and fee structure letters and also by receiving scholarships of students not registered with NIELIT, New Delhi, under the Post-Matric Scholarship Scheme.
The bench observed that if the facts and circumstances of the present case are seen in the light of the decision of the Supreme Court in Ram Kishor Arora versus Directorate of Enforcement, neither the violation of Article 22(1) of the Constitution of India is prima facie proved nor the provisions of Section 19 of the PMLA are found to have been violated.
The bench further observed that “considering the stand of the ED that the investigation is still going on, no benefit could be derived from the said fact; as such, the argument of the learned counsel appearing for the applicants that, in the present case, the other persons, against whom the allegations have been levelled, have not been arrested, is of no help to the case of the applicants.”
After considering the facts, the Single Bench of Justice Virender Singh dismissed the bail application, emphasising that observations made by the court shall not be taken as an expression of opinion on the merits of the case. The trial court shall decide the matter uninfluenced by any of the observations.
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