The deceased has been identified as Raj Kumar Bhalla (58), police said.
Superintendent of Police (SP) Naresh Dogra said the accused, Rohit Mehta, allegedly fired a volley of shots at Bhalla from a point blank range in front of the college principal's office.
Then Mehta, alias Tinnu, of Ram Nagar near Shimla Pahari, went to principal's and asked her to call the police.
Bhalla succumbed to his injuries on way to hospital, the SP said.
Preliminary investigations revealed that an embezzlement had taken place in the past for which Mehta's mother, who was a clerk in the college at that time, was held responsible.
Later, a compromise was made between her and the college management and after taking premature retirement she left the country, the SP said.
Mehta was of the view that Bhalla was responsible for implicating his mother in the embezzlement case which compelled her to leave the country, the SP said.
