Jyotsna Rewal Dua, J. - (1.)Where, based on alleged, prima facie, strong evidence, serious allegations of cheating, criminal breach of trust, forgery and siphoning of student scholarship funds in conspiracy with the government and bank officials have been levelled against the head of a private educational institute, then should he be granted regular bail on the ground that the investigating agency will take indefinite and indeterminate time for completely investigating the matter, considering the fact that investigation of one out of the two involved institutes headed by this person is over and of the other institute is going on at slow pace, is the main question raised in this bail petition.
(2.)Gist of Allegations:-
2(i). An FIR No.133 of 2018 was registered on 16.11.2018 at Police Station East, Shimla. FIR was registered on the basis of a complaint made by the State Project Officer, State Project Monitoring and New Initiative Unit, Department of Higher Education, Himachal Pradesh, Shimla. It was alleged in the FIR that various complaints were received in the Education Department regarding non-receipt of scholarships by the students under the State and Centrally Sponsored Schemes for SC/ST/OBC/MC students. Preliminary inquiry conducted by the State Project Officer revealed mis-appropriation of scholarship funds on large scale with complicity of officials working in the Education Department, Central Government, Banks and Private Institutions. It was further alleged in the FIR that income/caste certificates of students were not verified and did not appear to be genuine. Through single application, disbursement of scholarships under two different categories of SC & ST also came to light. Many loopholes were detected in 'hp-e-pass' software used by the State Education Department, whereby the same mobile and bank account numbers were accepted for more than one application. Applications for scholarships were accepted without regard to any Aadhar number. Instructions issued by the Central Government for disbursing the scholarships through smart cards were not adhered to by the officials of the Education Department. Verification of scholarship applications was not carried out by the concerned Education Department officials. It was further alleged that the private educational institutions had opened bank accounts of the students near their institutes. Some of the bank accounts in Chandigarh and Haryana were alleged to be dubious. 80% of total scholarship money disbursed was granted through private educational institutions.

2(ii). Pursuant to notification dated 20.03.2019, the FIR dated 16.11.2018 was entrusted to CBI and case RC0962019A0002 was registered on 07.05.2019 at CBI, ACB, Shimla under Sections 409, 419, 465, 466 and 471 of the Indian Penal Code against unknown persons. After entrustment of FIR, CBI carried out investigations. Noticing the complicity of public servants of Directorate of Higher Education, Bank Officials and Officials of the private educational institutions, Section 120-B of IPC and 13(2) read with 13(1)(c) and 13(1)(d) of the Prevention of Corruption Act, 1988, were added in the case. CBI conducted searches of 22 private institutions, which had disbursed the scholarships, w.e.f. 13.05.2019 to 16.05.2019 at 22 locations in the States of Himachal Pradesh, Haryana, Punjab and Union Territory of Chandigarh. Following table gives the macro view of post-matric scholarship funds alleged to have been illegally siphoned off through private institutions:-

2(iii). According to the status report, investigation is being conducted institution-wise. 22 private educational institutions in all are under investigation. Investigation of one of the institute, i.e. K.C. Group of Institutions, Pandoga, District Una, has been completed. Charge-sheet for embezzlement of scholarship funds of Rs.13.19 crores has already been filed in the Court of learned Special Judge (CBI), Shimla on 30.03.2020 by keeping the investigation open under Section 173(8) of the Code of Criminal Procedure. Investigation regarding second institute of K.C. Group of Institutions at Nawanshahr, Punjab is being carried out. According to the status report, the investigation has revealed that scholarships were claimed by these institutes without admission of students; documents of students, who had taken admission in K.C. Group of Institutions, Pandoga, District Una, were also used in K.C. Group of Institutions Nawanshahr, Punjab, for claiming scholarship; Some of the General Category students of K.C. Group of Institutions, Pandoga, District Una, were shown as students of SC category in K.C. Group of Institutions Nawanshahr, Punjab for claiming scholarship; Students shown as belonging to SC category in K.C. Group of Institutions, Pandoga, District Una during the years 2013- 14 and 2014-15, have been shown as belonging to ST students in K.C. Group of Institutions, Nawanshahr, Punjab, during the years 2015-16 and 2016-17; Many of the students were found non-existent during investigations. Scholarship funds of Rs.11.33 crores were disbursed to K.C. Group of Institutions, Nawanshahr, Punjab.

2(iv). Alleged role of petitioner:-

2(iv)(a). Petitioner is owner and Vice-Chairman of K.C. Group of Institutions, established by K.C. Social Welfare Trust. Two such K.C. Group of Institutions are involved in the FIR, i.e. K.C. Group of Institutions at Nawanshahr, Punjab and K.C. Group of Institutions at Pandoga, Una, H.P.

2(iv)(b). According to the status report, investigations revealed that:-

i). Petitioner in conspiracy with other co-accused Arvind Rajta, a government official, posted at the relevant time in Scholarship Branch of Directorate of Higher Education, Himachal Pradesh, Shimla and Surinder Pal Singh, working at the relevant time as Cashier at Central Bank of India, Nawanshahr Branch, Punjab, had claimed false scholarship funds in the name of 963 students during 2013-14 to 2016-17.

ii). 23 out of 24 students, shown by K.C. Group of Institutions Nawanshahr, Punjab, as residents of Districts Una, Kullu and Chamba, denied taking admission in the institution. Addresses of some of the students were found to be fake.

iii). Some of the students shown as beneficiaries of post-matric scholarship in K.C. Group of Institutions, Nawanshahr, Punjab w.e.f. 2013-14 to 2016-17 had purportedly taken admission in K.C. Group of Institutions, Pandoga, Una and not in Nawanshahr, Punjab.

iv). Scholarships were claimed by these two institutions without admission of students. Documents of students, who had taken admission in K.C. Group of Institutions, Pandoga, were used in K.C. Group of Institutions, Nawanshahr, Punjab for claiming scholarship. Some of the general category students, who had studied from K.C. Group of Institutions, Pandoga, Una, were shown as students of Scheduled Caste category for claiming scholarship. Students shown as belonging to SC category in K.C. Group of Institutions, Pandoga, Una during the years 2013-15 have been shown as belonging to ST category in K.C. Group of Institutions, Nawanshahr, Punjab during the years 2015-17.

v). Two bank accounts were opened for some of the students in the name of one student. In one bank account, students admitted their signatures on the account opening forms as well as their photographs, but denied having been granted any scholarship from the Directorate of Higher Education, Himachal Pradesh. In the second account opening forms, students denied their photographs as well as signatures. It has been alleged that the accounts have been opened by the bank officials in conspiracy with the petitioner.

vi). It is further alleged that the petitioner in conspiracy with co-accused Surinder Pal Singh, working as Cashier at the relevant time in Central Bank of India, Nawanshahr Branch, Punjab, had withdrawn scholarship amount through 49 vouchers amounting to Rs.48,75,500/- on a single day, i.e. 08.05.2018. Signatures of students did not match on these vouchers. Still these were passed by the Cashier fraudulently in conspiracy with the petitioner.

vii). Petitioner is also stated to have conspired with one Sunil Kumar, who operated a Computer Centre at Amb, Una. Documents of sixty students from this centre were statedly collected by the petitioner for claiming scholarship funds in conspiracy with co-accused Arvind Rajta, the then Superintendent GradeII, Directorate of Higher Education, Himachal Pradesh, Shimla. Documents of eighteen students of Computer Science of this Computer Centre were used by the petitioner for claiming scholarship funds.

viii). Allegedly, streams of various students were subsequently changed by K.C. Group of Institutions for claiming higher amount of scholarship, i.e. students, who had purportedly initially taken admission in the diploma course, were shown as students of degree course in the next year.

ix). It has also been alleged that as per the applicable guidelines, amount of fee component can be transferred directly to the bank account of the concerned institute, subject to the condition that the institute has not charged any fees from the students. Though no such affidavit was filed by K.C. Group of Institutions before the Directorate of Higher Education, Himachal Pradesh, still the scholarships were claimed on the basis of false information and forged documents in conspiracy with co-accused public servants.

x). Petitioner is stated to be the ultimate beneficiary of scholarship amount of Rs.11.33 crores, which has been claimed on the basis of false and forged documents in K.C. Group of Institutions, Nawanshahr and Rs.13.19 cores in K.C. Group of Institutions, Pandoga, Una. Petitioner has allegedly misappropriated the scholarship amount by violating all the guidelines and by submitting forged documents in conspiracy with co-accused public servants. Petitioner is involved in transferring the scholarship amount from the bank accounts of students to different bank accounts of K.C. Group of Institutions by using their documents and submitting false & forged documents of students.

(3.)Events:-
3(i). Petitioner was arrested on 03.01.2020. He is in judicial custody w.e.f. 08.01.2020.

3(ii). A previous bail application, being Cr.MP(M) No.209 of 2020, filed by the petitioner, was dismissed by a Co-ordinate Bench of this Court on 29.06.2020.

3(iii). Besides the petitioner, one Arvind Rajta, the then Dealing Hand-cum-Superintendent Grade-II, working in the Scholarship Branch, Directorate of Higher Education, Himachal Pradesh, Shimla, was also arrested on 03.01.2020. He is also in custody ever since and has moved bail application No.Cr.MP(M) No.1040 of 2020, which is being considered separately. One another co-accused Sh. Surinder Pal Singh, working as Cashier at the relevant time in the Central Bank of India, also arrested on 03.01.2020, was enlarged on bail by a Co-ordinate Bench of this Court vide order dated 11.06.2020 passed in Cr.MP(M) No.409 of 2020.

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