ED moves HC against trial court’s charge sheet order
The agency’s petition asserted that the trial court erroneously declined to take cognisance on a pure question of law without any adjudication on the merits of the allegations
The Enforcement Directorate (ED) on Friday moved the Delhi high court, challenging a special court’s order earlier in the week declining to take cognisance of its chargesheet in the National Herald money laundering case that names senior Congress leaders Sonia Gandhi and Rahul Gandhi.
The agency’s petition asserted that the trial court erroneously declined to take cognisance on a pure question of law without any adjudication on the merits of the allegations.
On Tuesday, special judge Vishal Gogne of the Rouse Avenue court had concluded it was impermissible in law to take judicial note of the chargesheet and summon the Gandhis. The court’s 117-page order stated that the ED’s case reflected a unilateral overreach of the Central Bureau of Investigation (CBI) and “an ill-advised out-pacing of the scheme of the PMLA itself”.
The trial court had reasoned that a prosecution complaint filed by an authorised officer under the Prevention of Money Laundering Act (PMLA) cannot rest on a scheduled offence arising from a private complaint and must be based on an offence registered by a law enforcement agency—either through a police FIR or a complaint by a person authorised to investigate the scheduled offence.
However, the ED’s petition argued that the special judge failed to appreciate that cognisance taken by a competent court on a private complaint constituting the scheduled offence stands on a much higher footing. The order, the ED asserted, has given a “hall pass” to a category of money launderers only on the ground that the scheduled offence is reported by a private individual through a complaint to a magistrate.
“The reasoning in the impugned order turns the basic jurisprudence on criminal law in its own head since it is well settled that any person can set the criminal law in motion,” the petition stated.
A scheduled offence is a crime specifically listed in the schedule of a statute such as the PMLA. These listed offences form the legal basis for invoking the act and prosecuting related activities like money laundering.
The petition contended that the judgment created two impermissible classes of scheduled offences, resulting in manifest arbitrariness, where a person who commits a scheduled offence would escape prosecution for the generation and laundering of proceeds of crime merely because the offence is based on a private complaint taken cognisance of by a magistrate.
“The impugned order has the effect of reading a bar into the legislation when there exists none. That, the effect of the impugned judgment is to amend or rewrite the statute especially Section 2(1)(u) and Section 2(1)(y) of the PMLA and to add words to the expression ‘scheduled offence’ to mean ‘scheduled offence only registered by a law enforcement agency’ which is impermissible and amounts to judicial legislation,” the petition added.
The ED’s case stems from a private complaint filed by Bharatiya Janata Party (BJP) leader Subramanian Swamy in 2012, alleging that the Gandhis, along with Congress leaders Oscar Fernandes (since deceased), Motilal Vora (since deceased), overseas Congress head Sam Pitroda and trustee and executive committee member of Rajiv Gandhi Foundation Suman Dubey, misappropriated funds to acquire ownership of National Herald, owned by Associated Journals Limited (AJL).
In his complaint, Swamy stated that AJL took an interest-free loan of ₹90.25 crore from the Indian National Congress and that Congress leaders conspired to misappropriate funds by paying only ₹50 lakh, through which Young Indian Private Limited (YI)—of which the Gandhis were majority shareholders—obtained the rights to National Herald.
In 2014, the trial court took cognisance of the complaint and summoned all the accused, including the Gandhis. The city court in December 2015 granted them bail.
In its chargesheet filed in April, the ED alleged that Sonia Gandhi and Rahul Gandhi illegally obtained the underlying assets of AJL, which ran the National Herald newspaper, and acquired crores as direct proceeds of crime. The chargesheet named Sonia and Rahul Gandhi as accused No. 1 and No. 2, respectively, under sections 3 and 4 (which deal with money laundering and its punishment) and section 70 (offences by companies) of the PMLA. The charges attract a maximum imprisonment of seven years if proved.
Established in 1937 by Jawaharlal Nehru, AJL published the National Herald, Qaumi Awaz in Urdu and Navjeevan in Hindi. It was given land in various cities at concessional rates to run the newspapers but closed operations in 2008 and offered a voluntary retirement scheme to all employees, which was accepted by them. By then, the debt on its books had risen to ₹90 crore, the money coming from the Congress.
It was taken over in 2010 by Young Indian, a company in which Sonia Gandhi and Rahul Gandhi together hold 76%. The allegation is that YI paid ₹50 lakh against the loan and took over AJL. The ED has alleged that AJL relaunched its news operations around 2016 “just to show that it is still engaged in publishing of newspapers” after investigations were started into the company’s affairs by various agencies.
Besides the Gandhis, the ED has also named Pitroda and former journalist Dubey in the chargesheet, along with Young Indian Private Limited and Kolkata-based Dotex Merchandise, which the ED claims is a shell company that gave a loan to YI as part of the conspiracy.
