Enforcement Directorate Appeals Delhi High Court Ruling on National Herald Case
ED Challenges Court Decision
The Enforcement Directorate (ED) has approached the Delhi High Court to contest a trial court's ruling that dismissed a money-laundering complaint against Congress leaders Rahul Gandhi and Sonia Gandhi in connection with the National Herald case.
Filed on Wednesday, the ED's petition labels the trial court's decision as 'erroneous'. The agency argues that the ruling undermines its authority to investigate the matter.
On Tuesday, Special Judge Vishal Gogne from the Rouse Avenue Court stated that the complaint brought forth by the ED under the Prevention of Money Laundering Act was not valid, as it stemmed from a private complaint initiated by BJP leader Subramanian Swamy.
The judge emphasized that the case lacked a first information report (FIR), rendering the complaint 'impermissible in law'.
According to the court, the ED can only pursue a money-laundering case if it is based on an FIR related to an alleged offense specified in the Prevention of Money Laundering Act.
Furthermore, the judge noted that the recent FIR registered by the Delhi Police’s Economic Offences Wing made it premature to evaluate the merits of the ED's allegations.
In its appeal, the ED contends that the trial court's ruling constitutes 'judicial legislation' by attempting to redefine 'scheduled offence' to mean only those registered by law enforcement agencies.
The agency stressed the necessity of a stay on the trial court's order to avert 'irreparable loss' to its investigation into the alleged money laundering involving the Congress leaders, which involves assets worth Rs 752 crore.
The Congress party has characterized the ED's actions as a 'political vendetta' orchestrated against the Gandhis at the behest of the ruling BJP government.
Background of the Allegations
In April 2008, the National Herald newspaper, originally founded and edited by Jawaharlal Nehru, ceased operations due to debts exceeding Rs 90 crore.
Subramanian Swamy lodged a complaint in 2012, accusing Sonia and Rahul Gandhi of establishing a company named Young Indian to acquire the newspaper's debt using party funds.
Swamy alleged that Young Indian paid merely Rs 50 lakh to gain rights over the Rs 90.2 crore owed by Associated Journals Limited to the Congress party.
The Congress maintains that no money was exchanged; rather, the debt was converted into equity to settle various obligations, including employee salaries.
On October 3, an ED Assistant Director filed a complaint with the Delhi Police, claiming that government properties allocated to Associated Journals Limited for public welfare were misappropriated for personal benefit.
The FIR cited sections of the Indian Penal Code related to cheating, criminal conspiracy, and misappropriation of property, naming several individuals and entities, including Sonia Gandhi, Rahul Gandhi, and Young Indian.
The ED has alleged that the case involves a significant criminal conspiracy and financial fraud, asserting that Young Indian fraudulently acquired properties worth over Rs 2,000 crore for a mere Rs 50 lakh.
According to the complaint, the accused have exploited these assets through fraudulent activities, such as collecting fake rents and generating false revenue from sham advertisements, thereby laundering illicit funds under the guise of legitimate transactions.
In November, the Delhi Police’s Economic Offences Wing registered a new FIR based on the ED's request, which allows the agency to share evidence for the registration of predicate offenses under the Prevention of Money Laundering Act.