Accepting an unconditional apology tendered by Punjab Chief Secretary KAP Sinha, the Punjab and Haryana High Court on Thursday pulled up the State Government for delaying criminal prosecution for nearly five years in an alleged scholarship scam case and held that Punjab had “misinterpreted” interim orders protecting certain institutions from coercive recovery steps by wrongly treating them as a shield against criminal prosecution as well.The Bench, headed by Chief Justice Sheel Nagu, observed that the state failed to seek clarification of the interim orders and instead “straight away complied with the same by misinterpreting the order”. The court accepted an unconditional apology tendered by Punjab Chief Secretary KAP Sinha, but made it clear that the State’s explanation was unacceptable on merits.“We are unable to accept the aforesaid explanation,” the Bench observed, while dictating the order in open court. The Bench added the interim orders passed on December 21, 2021, in connected writ petitions were “clear when they said that no coercive steps shall be taken against petitioners only in respect to recovery of amount and not in respect of any other aspect, including that of criminal prosecution.”The observations came during the hearing of a PIL concerning alleged large-scale irregularities in the disbursal of post-matric scholarships for Scheduled Caste students, initially pegged at around Rs 500 crore.Appearing before the Bench through virtual mode, the Chief Secretary attempted to justify the delay by referring to a Punjab Cabinet decision dated November 10, 2021. He submitted that the State understood the phrase “no coercive steps” –– when the matter reached the high court –– to include criminal prosecution because the alleged criminal liability arose from non-deposit of recoverable amounts by institutions.Sinha told the Bench that the State feared registration of FIRs could expose officials to contempt proceedings because recovery proceedings themselves had been stayed by the High Court in some petitions.The court, however, firmly rejected the reasoning. “If an information is given of commission of cognizable offence and it was found to be true as early as in 2020, then FIR should have been lodged there and then,” the Bench observed, referring to the Constitution Bench judgment in the case of “Lalita Kumari versus Government of Uttar Pradesh”.The court further noted that the State neither sought clarification of the interim orders nor acted in accordance with settled law.“Unfortunately, the State of Punjab did not seek any clarification of the said order,” the Bench observed. The court was also critical of the State’s selective action. During the hearing, it pointed out that FIRs had been registered against institutions not protected by interim orders, but not against those that had secured protection against recovery proceedings.’ED is already examining the matter’Appearing before the Bench, Additional Solicitor-General Satya Pal Jain said the Directorate of Enforcement was “already examining” the matter. He submitted that the ED had a copy of the FIR registered. In case any other FIR is registered, a copy should be supplied to the ED, Jain submitted, adding that the case allegedly involved nothing less than Rs 500 crore.