New DelhI/CHANDIGARH, Feb. 27 -- The Aam Aadmi Party (AAP) on Wednesday named a sitting Rajya Sabha member as its candidate for an upcoming assembly bypoll in Punjab, fuelling speculation that former Delhi chief minister Arvind Kejriwal will fill the vacant Upper House seat even as the party sought to scotch the rumours.

The party said that Sanjeev Arora, a Rajya Sabha member from Punjab, will be its candidate for the Ludhiana West assembly bypoll, whose date is yet to be announced. The seat fell vacant when sitting legislator Gurpreet Bassi Gogi died of a gunshot injury after his licensed weapon accidentally went off last month.

The announcement sparked allegations from the Congress and the BJP that Kejriwal, who was defeated in the Delh...