National Herald Row: No Notice To Sonia, Rahul; Delhi Court Seeks Missing Documents From ED

Amid the ongoing row over the National Herald money laundering case involving several Congress leaders, a Delhi court on Friday refused to issue notice to Sonia Gandhi, Rahul Gandhi and others for now.

On April 15, federal investigation agency Enforcement Directorate (ED) filed a chargesheet against Sonia Gandhi, Rahul Gandhi and others on charges of money laundering in the National Herald case. The chargesheet also included Congress leader Sam Pitroda and Suman Dubey as accused persons.

Special judge Vishal Gogne examined the chargesheet, which was filed on April 9, on the point of cognisance and posted the matter for further proceedings on April 25.

On Friday, April 25, Gogne was acting on a plea of the ED, which claimed cognisance of the complaint (ED's equivalent to a chargesheet) cannot be taken without hearing the accused according to the new provisions of law.

As per PTI, the judge said before the court is satisfied that notice is required, it couldn't pass such an order. "Before court passes any order, it has to see if there is any deficiency", the judge added.

"There are certain documents missing in the chargesheet as highlighted by the Ahlmad. ED is directed to file those documents. After that the court will decide the issue of notice," the court said while posting the matter on May 2. 

On April 15, ED said in a statement that it has served the relevant documents to the respective registrar of properties where the assets are located.

Simultaneously, the notices have been affixed at "conspicuous part of these properties" located at Herald House at ITO (5A, Bahadur Shah Zafar Marg) in Delhi, in the Bandra(E) area (Plot No 2, Survey No 341) of Mumbai and the AJL building located at Bisheshwar Nath Road (Property No.1) in Lucknow, Uttar Pradesh, on Friday.

"A notice... has also been served to Jindal South West Projects Limited which occupies the 7th, 8th, and 9th floors at Herald House, Bandra (E), Mumbai, to transfer the rent/lease amount every month in favour of the director, Directorate of Enforcement," it said.

The legal action has been taken under Section (8) and Rule 5(1) of the Prevention of Money Laundering Act (PMLA) that talks about the procedure of taking possession of assets attached by the ED and then confirmed by the adjudicating authority (of the PMLA).

ED Investigation So Far

Back in 2023, ED attached immovable assets worth rupees 661 crore, apart from shares of AJL worth rupees 90.2 crore in an attempt to "secure the proceeds of crime and to prevent the accused form dissipating the same."

The adjudicating authority confirmed this order in April last year. According to the ED, the total "proceeds of crime" in the case was rupees 988 crore.

The complaint, the ED said, highlighted a "criminal conspiracy" by several prominent political figures, including the first family of the Congress party led by Sonia Gandhi, her MP son Rahul Gandhi, apart from late Congress leaders Motilal Vora and Oscar Fernandes and also Suman Dubey, Sam Pitroda and a private company Young Indian for alleged involvement in a money laundering scheme related to the fraudulent takeover of properties valued over rupees 2,000 crore belonging to the AJL.

What is National Herald?

The National Herald newspaper was started by India's first Prime Minister Pandit Jawaharlal Nehru in 1938 from Lucknow. It was part of the independence movement against the British.

Associated Journals Limited (AJL), which published National Herald along with 'Qaumi Awaz' in Urdu and 'Navjeevan' in Hindi, did not belong to any one person but was founded in 1937 with 5,000 other freedom fighters as its shareholders, as per Business Standard. There were 1,057 shareholders in 2010.

The Gandhi Link

Congress leaders Sonia Gandhi and Rahul Gandhi are majority shareholders of Young Indian Ltd (YIL) which later acquired AJL. Rahul and Sonia Gandhi together had 76 percent of ownership.

The ED claimed its investigation has "conclusively" found that Young Indian, a private company "beneficially owned" by Sonia Gandhi and Rahul Gandhi, "acquired" AJL properties worth rupees 2,000 crore for a mere rupees 50 lakh, significantly undervaluing its worth.

Subramanian Swamy's complaint

The ED investigation began in 2021 after the Metropolitan Magistrate at Patiala House Courts in Delhi took cognisance of a private complaint filed by BJP leader Subramanian Swamy on June 26, 2014.

Swamy in 2014 filed a complaint alleging some Congress leaders, including the Gandhis, were involved in cheating and breach of trust in the acquisition of Associated Journals Ltd (AJL) by Young Indian Ltd (YIL) in 2011, as per a report by the Business Standard.

AJL published the National Herald newspaper in English, Qaumi Awaz in Urdu, and Navjeevan in Hindi until 2008, when it was shut down after running into losses. 

The Congress party granted a rupees 90 crore interest-free loan to the AJL to help it, but it could not be revived, and AJL failed to repay the loan to the Congress, according to The Financial Express. 

Under the Income Tax Act, no political organisation can have financial transactions with a third party. In 2010, AJL declared the loan cannot be paid and transferred the loan to YIL. In lieu of it, AJL also issued its shares to YIL, giving YIL control of 99 per cent of AJL and its real estate assets. YIL paid a further consideration of Rs 50 lakh to AJL.

The report added that the Congress party wrote off the loan given to AJL as unrecoverable.

This meant, as per the complaint, that YIL ended up having the control of AJL and its real-estate assets for rupees 50 lakh on a rupees 90 lakh loan that Congress party wrote off. 

Case Goes Beyond Newspaper

The real estate, pegged at around rupees 2,000 crore, owned by AJL in cities such as Delhi, Mumbai, Patna, and Panchkula, is at the centre of the case.

By acquiring AJL, the Gandhis-owned YIL also acquired this real estate. The acquisition is controversial as they inherited such massive real estate in lieu of loan of 90 crore at a payment of rupees 50 lakh, as per Swamy's complaint.