An alleged multi-crore scam in a post-matric scholarship scheme for Scheduled Caste students that occurred during the Congress government’s tenure in Punjab has come back to haunt the incumbent Aam Aadmi Party (AAP) government after the Punjab and Haryana High Court questioned why no First Information Report (FIR) had been registered despite the matter being under inquiry for years.The scam came to light in 2019, when Captain Amarinder Singh was the chief minister, and Sadhu Singh Dharamsot was the social justice, empowerment and minorities minister. After several inquiries—during the Congress as well as the AAP government’s regime—and the dismissal of five officials, no FIR has been registered. The AAP government had handed the case to the Punjab Vigilance Bureau in January 2023.Hearing a Public Interest Litigation (PIL), a division bench of Chief Justice Sheel Nagu and Justice Sanjiv Berry on Monday directed the state to clarify whether the complaint disclosed a cognisable offence and, if so, why an FIR had not been lodged within the stipulated time frame.In its order, the bench noted that the complaint dated May 29, 2023, was still under preliminary inquiry and sought a clear response on “whether the complaint…discloses a cognisable offence or not, and if yes, then why was the FIR not filed within the stipulated period of 15 days/30 days” as mandated by the Supreme Court in Lalita Kumari vs Government of Uttar Pradesh.The order has sent the government into a tizzy. “We are now looking at the files again,” an official said, adding that the vigilance bureau has already been investigating the matter. “The probe is on. The outcome will be there soon.”The court further observed that there was no justification for such a prolonged preliminary inquiry, stressing that its scope is limited to determining whether a cognisable offence is made out. “We see no reason why the preliminary inquiry should take such a long period of time,” the bench remarked.During the hearing, the court repeatedly questioned the state’s stand that the matter was still at the inquiry stage, pointing out that an investigation can only follow registration of an FIR. It also flagged that the issue dates back to at least 2019, when the first committee examined the scheme, followed by another report in 2020, yet no criminal case had been initiated.Story continues below this adThe petitioners had alleged large-scale irregularities in the disbursal of post-matric scholarships, claiming that funds were siphoned off through bogus or non-existent institutions, including entities outside Punjab. They referred to official findings indicating financial irregularities to the tune of about Rs 258 crore flagged in one report, while earlier dues and suspected diversion were pegged at around Rs 505 crore. They had sought a CBI probe into the matter.A scam running into croresThe case pertains to alleged irregularities in the post-matric scholarship scheme for Scheduled Caste students, with the scam estimated at around Rs 60 to 65 crore, though discrepancies were flagged in a larger pool of funds running into several hundred crores released under the scheme.Investigations and departmental probes pointed to a pattern of manipulation involving private educational institutions. The alleged modus operandi included inflating student admissions, creating fake or “ghost” beneficiaries, and exaggerating fee structures to claim higher reimbursements from the government. Funds were released on the basis of data submitted by institutions, but verification mechanisms were found to be weak, allowing inflated claims to be processed.The irregularities largely relate to the period when Dharamsot headed the department concerned. While the former minister has denied any wrongdoing, inquiries flagged serious administrative lapses, including a failure to verify claims and monitor the disbursal of funds.Story continues below this adFormer principal secretary of the department, and a senior IAS officer, Kripa Shankar Saroj, was the whistle-blower in the case. He conducted a thorough probe and submitted the report to the then chief minister.The AAP was in Opposition at that time. It had demanded a thorough investigation into the alleged scam. After taking over the reins of the state, the AAP leaders had stated they would not spare anyone.What the inquiry report saidAn inquiry report submitted in July 2022 by B R Bansal, a former district and sessions judge, pointed out that instructions of the then chief minister and principal secretary of the department were ignored, granting undue benefits to certain private institutions by adopting unfair practices.The inquiry was conducted against six officials—deputy director Parminder Singh Gill, deputy controller Charanjit Singh, section officer Mukesh Bhatia, superintendent Rajinder Chopra, and Rakesh Arora and Baldev Singh, both senior assistants, after chargesheets were served on them by the department in 2020 following a probe conducted by a high-level committee comprising IAS officers KAP Sinha, VP Singh and Jaspal Singh. These officials were suspended in July 2022 and later dismissed in 2023.Story continues below this adAlso Read | Punjab sacks 6 govt employees for role in scholarship scamThe inquiry officer pointed out that instead of taking action against the defaulter educational institutions, undue financial benefits running into crores of rupees were allegedly extended to them. Instead of seeking approval from the finance department for a reaudit of 14 institutions, the errant officials allegedly added the names of other institutions to extend undue financial benefit to themselves, the probe found. The report also pointed out that an undue payment of Rs 16.91 crore was made to nine institutions after the directorate re-audited their accounts, without any order from the finance department.The errant officials, instead of making a single file, created multiple files for approval and made payments to specific institutions in violation of a Cabinet decision for fair and transparent disbursal of funds. Saroj had initially submitted a report to the then chief secretary in August 2020, regarding the gross irregularities in the disbursal of funds. The inquiry officer has pointed out that “noting pages” recorded by the then additional chief secretary were found missing from the records.When AAP blamed CongressAfter the officials were dismissed in 2023, Finance Minister Harpal Cheema and Social Justice Minister Dr Baljit Kaur stated that a further inquiry had been recommended to the Vigilance Bureau for a thorough probe into the scam.Kaur stated that the scam took place in 2019, during the Congress-led state government, and discrepancies amounting to Rs 55 crore were detected, of which over Rs 16 crore of excess payment was allocated to some colleges. Instead of taking action against these institutes, benefits running into crores were extended to them again.Story continues below this adAlso Read | Punjab: CM Bhagwant Mann orders inquiry into scholarship scamShe also alleged that the probe found that there was no proof of Rs 39 crore, which was disbursed to some “ghost” colleges, and the then chief minister Captain Amarinder Singh gave a clean chit to Dharamsot.She added that a departmental investigation revealed that disbursal of scholarship to eligible SC students was ignored, and undue benefits were given to certain private institutes. The previous government had ordered an audit to unearth the scam; however, instead of collecting the funds given to “ghost” colleges, the Congress government re-ordered the audit and gave more funds to them, she claimed.Cheema had stated that Congress leaders were vocal on probing the wrongdoings in the disbursal of the scholarship during the Shiromani Akali Dal government’s tenure, but when it formed the government, the Congress did not take any action against anyone, which clearly indicated that the two parties were hand in glove. He said the number of students applying for the scheme drastically reduced to 1.95 lakh in 2021-22 compared to the past years due to non-disbursal of funds to eligible students.