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National Herald case: Court junks ED charge sheet against Gandhis
A Delhi court rejected the ED's charge sheet against Sonia and Rahul Gandhi in the National Herald case, citing legal procedural issues.
New Delhi: A Delhi court on Tuesday declined to take cognisance of a charge sheet, filed by the Enforcement Directorate (ED) in the National Herald case, which names senior Congress leaders Sonia Gandhi and Rahul Gandhi.
The court said that it was impermissible in law to take judicial note of the charge sheet and summon the Gandhis. The court also detailed in its 117-page order that ED’s case reflected a unilateral overreach of the other law enforcement agency viz. the Central Bureau of Investigation (CBI) on one hand and “an ill-advised out-pacing of the scheme of the PMLA itself”.
“Since the present prosecution complaint pertaining to the offence of money laundering is founded on cognizance and summoning order upon a complainant under section 200 CrPC filed by a public person namely Dr. Subramanian Swamy and not upon a FIR, cognizance of the present complaint is impermissible in law,” said special judge Vishal Gogne of Rouse Avenue court.
The judge added that cognisance of the present complaint was liable to be declined on the question of law, and other arguments relating to the merits of the allegations were not required to be adjudicated.
The court, however, said that ED was at a liberty to further argue its case on the next date of hearing.
The federal financial crimes probe agency will challenge the order, officials familiar with the development said, adding that the Delhi Police’s economic offences wing (EOW), in October, already registered a first information report (FIR) in ED’s complaint and the cops are likely to conclude their investigation “quickly”, which will give the central agency a predicate offence case.
To be sure, the Opposition has already raised questions about the timing of this Delhi Police FIR and alleged that it was registered only over worries that ED’s actions based on a private complaint might not be approved by courts.
“Meanwhile, we will consult with our legal team and file an appeal against the special PMLA court’s Tuesday order,” said an ED officer, who asked not to be named.
The Congress said ED’s proceedings against the Congress leadership were found to be “completely illegal and mala fide”. “Truth has prevailed, and truth will always prevail,” Congress spokespersons Pawan Khera and Mohammed Khan told a joint press conference.
The BJP said the development didn’t clear Sonia Gandhi and Rahul Gandhi. “No cognisance is not a clean chit…the dismissal is procedural, not on merit,” BJP spokesperson Gaurav Bhatia said on X.
In its charge sheet in April, ED had alleged that Sonia Gandhi and Rahul Gandhi illegally obtained the underlying assets of Associates Journals Limited (AJL), which ran the National Herald newspaper, and acquired crores as direct proceeds of crime. The charge sheet mentioned Sonia and Rahul Gandhi as accused number 1 and 2, respectively, under sections 3 and 4 (which deal with money laundering and its punishment) and section 70 (offences by companies) of the Prevention of Money Laundering Act or 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 of India for the purpose of publishing newspapers. But it 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 (YI), 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. ED has alleged that AJL, which got land in various cities at concessional rates to run the National Herald, but closed the newspaper in 2008, relaunched its news operations around 2016 “just to show that it is still engaged in publishing of newspapers” after an investigation was started into company’s affairs by various agencies.
But the court on Tuesday underlined that ED proceeded to file an ECIR – equivalent to an FIR – before the court despite the absence of a predicate offence.
“The court finds the approach of the ED towards the particular allegations made by Dr. Swamy to have been cognizant of the necessity of a FIR by a law enforcement agency viz. the CBI as a jurisdictional foundation for the investigation under the PMLA.”
The order further said, “There is no doubt that there existed a long lasting consensus between the CBI and the ED regarding the non advisability of the registration of a FIR by either agency. The deference of the ED to the CBI was, however, abandoned when it went ahead with recording an ECIR relating to money laundering…when no FIR (with the CBI or other agencies) existed in relation to the scheduled offence”.
The court observed that ED “simply inverted the template” of money laundering being a consequential step to a predicate offence, by filing its own ECIR before the court, seven years after having shared information with CBI regarding the case.
“This act was not a mere expression of the independent nature of the ED as an agency to probe proceeds of crime,” the court held.
The court said that ED’s action in the case reflected a unilateral overreach of the other law enforcement agency viz. CBI on one hand, and an ill-advised out pacing of the scheme of the PMLA itself.
The court said that as per law, the offence of PMLA dictates that the scheduled offence be recorded and investigated as the first step and a probe into money laundering begins as the second step. “Perhaps, the ED should have stayed as staid as the CBI,” the court said.
The court further said that since the Delhi Police’s Economic Offences Wing had already lodged an FIR in the case, it was premature for the court to adjudicate the contents presented by ED through its chargesheet. “The arguments have not touched the merits of the case from either party,” the court added.
Through a separate order, the court declined to provide copies of the EOW FIR in the National Herald case to the accused persons, holding that they were not entitled to the same. The court, however, allowed the accused to access information regarding the case.
The ED’s counsels, additional solicitor general SV Raju, assisted by special counsel Zoheb Hossain, had argued in court that the accused persons took over debt-ridden AJL through Young Indian (YI) in a ‘surreptitious manner’ to amass its assets worth over ₹2,000 crore through a mere loan of ₹50 lakh. ED also claimed to have found a trail of around ₹988 crore amassed illegally as proceeds of crime.
Congress leaders Sonia Gandhi and Rahul Gandhi’s counsels, through senior advocates RS Cheema and Abhishek Manu Singhvi respectively, had maintained that YI was trying to revive AJL in a bid to continue its legacy and ideals. Cheema had argued that while acquiring AJL, none of its assets were moved towards YI or the Gandhis, who only held shares, constituting no money laundering.
Besides the Gandhis, ED had also named overseas Congress head Sam Pitroda and former journalist Suman Dubey in the charge sheet, along with the Young Indian Private Limited (YI) and Kolkata-based Dotex Merchandise, which ED claims as a shell company which gave a loan to YI as part of the conspiracy.
