When Liberty Outpaces the Ledger: Constitutional Mandates Overrule PMLA Rigors in Massive Scholarship Scam
This case centers on the High Court of Himachal Pradesh granting bail to Arvind Rajta, a public servant accused of involvement in a scholarship scam exceeding ₹200 crore. Rajta, a Dealing Assistant in the Department of Higher Education, allegedly verified fraudulent claims for 28 private institutions and laundered proceeds through shell entities formed with his family. Despite the “twin conditions” of Section 45 of the PMLA, which typically make bail difficult to obtain, the Court prioritized the constitutional right to a speedy trial under Article 21, citing Rajta’s prolonged incarceration and the unlikely conclusion of the trial in the near future.
The Context of the Accusations
The Enforcement Directorate (ED) alleged that Rajta played a pivotal role in siphoning funds meant for SC/ST/OBC students. Specifically:
- Fraudulent Verification:Rajta allegedly verified claims despite irregularities like changing student courses and caste categories.
- Money Laundering: He was accused of creating shell entities—such as M/s ASA Marketing Solutions—to acquire property and invest in hotels using “proceeds of crime”.
- Predicated Offence: The case is linked to a CBI investigation where Rajta had previously been granted bail after his initial arrest in 2020.
The Conflict: Statutory Rigor vs. Constitutional Mandate
The ED opposed the bail, arguing that economic offences of this magnitude demand a sympathetic view toward the victims rather than the accused and that Rajta’s role was on a “higher pedestal” than others. However, the Court identified several factors necessitating Rajta’s release:
- Prolonged Incarceration:Rajta had been in custody since August 30, 2023, following prior time spent in CBI custody, totaling over two years and four months of detention.
- Voluminous Records: The prosecution relied on 132 witnesses and over 83,000 documents in the PMLA case alone, suggesting the trial would take years to conclude.
- Interdependence of Trials: The Court noted that under the PMLA, “proceeds of crime” cannot be proven unless the scheduled offence (the CBI case) is established first. Since the CBI case was still only at the stage of considering charges, a final decision in the PMLA trial was nowhere in sight.
The Court’s Reasoning and Conclusion
Guided by Supreme Court precedents like Manish Sisodia v. ED and V. Senthil Balaji v. ED, the Court held that “bail is the rule and jail is the exception”. It emphasized that statutory restrictions like Section 45 of the PMLA cannot be used to justify indefinite detention without trial. Justice Virender Singh observed that the delay was not attributable to Rajta but to the complexity of the case and the conduct of co-accused persons.
Consequently, the Court allowed the bail application, ruling that the constitutional mandate for liberty must prevail over statutory embargoes when a timely trial is impossible. Rajta was ordered to be released on a personal bond of ₹2,00,000 with two sureties, subject to stringent conditions including surrendering his passport and attending every hearing.
Himachal Pradesh High Court
Arvind Rajta V. Directorate of Enforcement (Ed): STPL (Web) 2026 HP 10






