National Herald case: Delhi High Court seeks response from Sonia, Rahul Gandhi on ED's challenge to dismissal of complaint

The Delhi High Court on Monday issued notice to Rahul Gandhi, Sonia Gandhi and other accused in the National Herald case on Enforcement Directorate's (ED) plea challenging the trial court order dismissing its money laundering complaint..Justice Ravinder Dudeja sought response from Gandhis after hearing the ED. .Solicitor General Tushar Mehta, appearing for ED, said that if the trial court judgment is allowed to stand, it will render the Prevention of Money Laundering Act (PMLA) redundant. "This brings the PMLA on its head. It becomes otiose and redundant if this order is to sustain," he said.He said that the case needs final adjudication."This matter needs final adjudication on the returnable date, my lord may consider hearing us and then have it finally," the SG submitted.The Court issued notice on the main plea as well as stay application and posted the case for further hearing on March 12, 2026.Senior Advocate Abhishek Manu Singhvi appeared for Gandhis."I want to say something on notice. There is a perspective, contrary to why my friend has said," he said.The Court eventually proceeded to issue notice to Gandhis on the main plea as well as stay application.It listed the case for further consideration on March 12..Apart from Gandhis, Suman Dubey, Sam Pitroda, Young Indian, Dotex Merchandise and Sunil Bhandari had also been made accused by the ED.Special judge (PC Act) Vishal Gogne of the Rouse Avenue Court had on December 16 rejected ED's complaint, holding that it was not maintainable under the Prevention of Money Laundering Act (PMLA) since the case was based on a private complaint filed by BJP leader Subramanian Swamy and not any First Information Report (FIR).“Since the present prosecution complaint pertaining to the offence money laundering is founded on cognisance and summoning order upon a complaint under Section 200 CrPC filed by a public person, namely Dr Subramanian Swamy, and not upon an FIR, cognizance of the present complaint is impermissible in law,” the special judge ruled.He underscored that ED can initiate a money laundering case only based on an FIR with respect an offence mentioned in the schedule of the PMLA..The National Herald case stems from a private complaint by former Union Minister Subramanian Swamy accusing Sonia Gandhi, Rahul Gandhi, Motilal Vora, Oscar Fernandes, Suman Dubey, Sam Pitroda, and Gandhi family-controlled Young Indian of cheating, criminal conspiracy, criminal breach of trust and misappropriation of property.The ED filed a prosecution complaint against the Gandhis as well as Pitroda and others on April 15 this year..According to ED, there was laundering of 'proceeds of crime' derived from the alleged fraudulent takeover of the properties of Associated Journals Limited (AJL) – publishers of National Herald, which is worth more than ₹2,000 crore - by a company called Young Indian. Gandhis are stated to be the majority shareholders in the firm. It is ED's case that the shares of AJL were transferred to Young Indian under a criminal conspiracy to illegally obtain the assets of AJL. The value of shares, the immovable properties of AJL and the rent generated from them are the alleged proceeds of crime in the ED case.However, the Gandhis have contended that it is a strange and unprecedented case where allegations of money laundering have been made without the use or projection of the property. The Congress leaders have refuted ED’s allegations that Young Indian was used to usurp AJL’s assets in exchange for a loan. It is their argument that the loan was to make AJL debt-free..In its revision plea against the trial court order, the ED has stated that the order is "totally perverse in law" as the sole reason the court declined to take cognisance was that the prosecution complaint (chargesheet) cannot be based on a scheduled offence emanating from a private complaint by a private individual and that the scheduled offence must be registered only by a law enforcement agency. According to ED's plea, the trial court erred in its findings. The agency contended that the cognisance taken by a court on a private complaint stands on a much higher footing than "a mere FIR registered by police because there is a possibility that the cognisance may be declined after filing of a chargesheet by police".The agency added that the Court's reasoning "turns basic criminal law jurisprudence on its head for the reason that it is well settled that ‘any person can set the criminal law in motion’."As per the plea,"The impugned order has, in effect, given a hall pass to a category of money launderers only on the ground that the scheduled offence is reported by a private individual by way of a complaint to a magistrate." Further, according to ED's plea, the effect of the trial court judgement is to amend and rewrite the PMLA, especially Section 2(1)(u) and Section 2(1)(y) to add words to the expression ‘scheduled offence’ to mean ‘scheduled offence only registered by a law enforcement agency’"This is impermissible and amounts to judicial legislation, the agency said in its plea..SG Tushar Mehta, appearing for ED, said on Monday that the special judge's order will impact various cases."The sum and substance of the impugned order is that if someone files a one-page FIR that can be subject matter of ED offence, but a court taking cognisance under section 200 CRPC, that cannot be the basis of an ED complaint. The Court has gone horribly wrong. It is not just this case, but it will affect several other cases. It [court] says ED cannot do anything if a court has taken cognisance of a private complaint," the SG submitted..The Court asked Court whether there is any case pending where based on a private complaint and cognisance taken by the court, ED has initiated any cases. "This may be the first one?" the Bench queried..The SG said that the PMLA does not specify any mode or manner in which a money laundering offence can be registered by ED."The mode and manner of registration of the offence is not mentioned [in PMLA]. What is necessary is that there has to be an allegation, a criminal activity and the criminal activity must pertain to a scheduled offence. It does not say FIR or criminal complaint. According to me, the criminal complaint stands on a higher footing," the SG contended."The cognisance of this [of Subramanian Swamy's complaint] was taken by the court after examining the complainant?" the Court asked. "Yes, and witnesses," the SG replied.The SG said that the impact of the verdict is that there has to be a First Information Report to trigger PMLA and the same cannot be done by a court based on a private complaint."The sum and substance of the trial court finding is that only FIR can result in an ED offence, even if the court takes cognisance, examines witnesses and says a prima facie case is made out, even if that offence is a predicate offence, ED cannot start an investigation. It [trial court order] says Mr [Subramanian] Swamy should have gone and filed an FIR. Because he went to court, money laundering cannot be investigated. Even though the offence is a scheduled offence, ED cannot investigate. Even if there has been an application of the judicial mind, it cannot be investigated," the SG contended..Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.