HP HC Grants Bail to Govt Official in ₹200 Cr Scholarship Scam Case Citing Prolonged Incarceration and Delay in PMLA Trial [Read Order]

In a recent ruling, the Himachal Pradesh High Court granted bail to a government official accused in a Rs. 200 crore post-matric scholarship scam holding that prolonged incarceration and delay in trial under the Prevention of Money Laundering Act (PMLA) cannot justify continued detention.

Arvind Rajta, the applicant, approached the High Court seeking regular bail. The case arose from alleged misappropriation of scholarship funds which were meant for Scheduled Castes (SC), Scheduled Tribes (ST) and Other Backward Classes (OBC) students in Himachal Pradesh.

The ED registered a case based on FIR and a CBI case relating to large-scale irregularities in the disbursement of post-matric scholarships to students studying in private institutions.

The applicant was working as a Dealing Assistant in the Scholarship Branch of the Directorate of Higher Education at the relevant time. He was accused of wrongly verifying scholarship claims and facilitating diversion of funds. He was arrested by the ED on 30 August 2023 and had remained in custody for more than two years when the court heard the present application.

The applicant's counsel argued that both the predicate CBI cases and the PMLA proceedings were still at the stage of consideration of charge and that the trial had not begun. They submitted that the cases involved a large number of witnesses and voluminous documents, making early completion of the trial unlikely.

The counsel further argued that the delay was not caused by him and that continued custody violated his right to speedy trial under Article 21 of the Indian Constitution.

The ED's counsel opposed the bail plea and argued that the applicant was involved in a serious economic offence concerning public money meant for underprivileged students. They argued that the twin conditions under Section 45 of the PMLA were not satisfied and that long custody alone was not a valid ground for bail.

The ED's counsel also claimed that the delay in the trial was due to the conduct of the accused persons and not because of the prosecution.

After examining the record, Justice Virender Singh observed that charges had not been framed either in the PMLA case or in the predicate offences. The court pointed out that the matter involved a very large number of witnesses and extensive documentary material. It observed that there was no real possibility of the trial concluding in the near future. The court further observed that the delay in the proceedings could not be attributed to the applicant.

Relying on several Supreme Court decisions such as V. Senthil Balaji, Manish Sisodia, K.A. Najeeb and Mahesh Joshi, the court explained that strict bail conditions under special laws like the PMLA cannot be used to keep an accused in jail for an indefinite period. The court pointed out that constitutional courts have the power to grant bail where long incarceration and delayed trial result in violation of personal liberty.

The court observed that considering the long period of custody already undergone by the applicant and the unlikelihood of early conclusion of trial, the rigours of Section 45 of the PMLA stood diluted. The court held that the twin conditions for grant of bail could be treated as satisfied at this stage, subject to strict conditions.

The court allowed the bail application and directed that the applicant be released on bail on furnishing the required bonds and sureties. Regular bail conditions were imposed.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates