Why Delhi Court Dismissed ED's Complaint Against Rahul Gandhi, Sonia Gandhi In National Herald Case

A Delhi Court has refused to take cognizance of Enforcement Directorate's money laundering complaint in the National Herald case allegedly involving Congress leaders Rahul Gandhi and Sonia Gandhi.

Special Judge Vishal Gogne of Rouse Avenue Courts passed the order dismissing the prosecution complaint, which is equivalent to a chargesheet.

Here are reasons why the Court did so.

Money Laundering Chargesheet Not Maintainable In Absence Of FIR

The Court said that the investigation and prosecution complaint pertaining to the offence of money laundering was not maintainable in the absence of an FIR for the predicate offence. The ED's complaint was filed based on a private complaint filed by Subramanian Swamy and not based on an FIR in a predicate offence.

It added that a complaint case and the incidents of an FIR are chalk and cheese in their contribution to evidence collection and meaningful trial.

“It is rather the permissibility, in law, of the ED commencing investigation (through an ECIR) and subsequently filing a prosecution complaint in the absence of a FIR qua the scheduled offence (predicate offence) which is the projected infirmity in the jurisdiction of the ED to institute the present complaint,” the Court said.

Money Laundering Probe Not Maintainable On Basis Of Complaint Under Section 200 CrPC, Summoning Order

The judge ruled that an investigation pertaining to the offence of money laundering is not maintainable on the basis of a complaint under section 200 of Cr.PC and consequent order of cognizance as well as summoning when such complaint has been filed by a public person.

The Court said that complainant cannot conduct any investigation akin to the police or other investigating agencies.

It added that a complaint by a public person under section 223 of Cr.PC, even if it discloses a scheduled offence, shall not create jurisdiction in the ED to commence investigation regarding proceeds of crime arising from such scheduled offence.

Cognizance Impermissible In Law As Complaint Founded On Summoning Order Upon Subramanian Swamy's Complaint, Not FIR

The Court ruled that the cognizance of ED's complaint was impermissible in law since the prosecution complaint pertaining to the offence of money laundering was founded on cognizance and summoning order upon a complaint filed by a public person- Dr. Subramanian Swamy, and not upon a FIR.

It held that a prosecution complaint filed before a court in the absence of a FIR pertaining to the scheduled offence is not capable of being taken cognizance of.

“For reason of the above finding having been rendered by the court, the present prosecution complaint, based as it is on a complaint under section 200 Cr. PC regarding a scheduled offence, filed by a public person(Dr Subramanian Swamy) and not a preceding FIR regarding the scheduled offence, is not capable of being taken cognizance of,” the Court said.

Cognizance Declined On Law, Merits Not To Be Adjudicated

The judge further observed that since cognizance upon ED's complaint was being declined on a question of law, other arguments relating to the merits of the allegations were not required to be adjudicated.

The Court said that it is only the complaint by an investigating officer from a law enforcement agency and not a complaint by a public person which is in the contemplation of the PMLA.

“The complaint by Dr Subramanian Swamy and the resultant summoning order dated 26.06.14 do not confer authority upon the ED to have commenced investigation through an ECIR in the present allegations and to then have filed the present prosecution complaint,” the Court said.

Premature To Decide ED Submissions, Court Cites Subsequent FIR By EOW

The Court ruled that it was premature and imprudent to decide the submissions made by the ED as well as the proposed accused in relation to the merits of the allegations, in view of the ongoing further investigation by the ED in consequence of the FIR registered by the EOW.

The judge reasoned that the investigation by the EOW and the possibility of further investigation by the ED makes it imprudent for the court to render any prima facie finding qua the existing allegations.

“In sum, it has now become premature and imprudent for the court to decide the submissions made by the ED as well as the proposed accused in relation to the merits of the allegations, especially so when cognizance is liable to be declined on a pure question of law. Other arguments possibly live to fight another day,” the Court said.

Further, the judge noted that despite receiving the complaint made by Swamy and the consequent summoning order in the year 2014, the CBI refrained from registering a FIR in relation to the alleged scheduled offence till date.

“However, the ED went ahead with recording an ECIR relating to money laundering on 30.06.2021 when no FIR(with the CBI or any other LEA) existed in relation to the scheduled offence,” the Court noted.

“Cognizance of the offence defined under section 3 and punishable under section 4, read with section 70 PMLA in the present complaint is declined. The complaint is dismissed,” it held.

The ED had filed a prosecution complaint against Rahul Gandhi and Sonia Gandhi under sections 44 and 45 of Prevention of Money Laundering Act (PMLA) 2002 for commission of offence of money laundering as defined under section 3 read with section 70 and punishable under section 4 of PMLA, 2002.

The controversy centers around the acquisition of Associated Journals Limited (AJL), the publisher of the now-defunct National Herald newspaper.

In 2010, a newly formed company, Young Indian Pvt Ltd (YIL), acquired AJL's debts from the Indian National Congress for ₹50 lakh.

Subsequently, YIL took control of AJL's assets, which were valued at over ₹2,000 crore. Sonia Gandhi and Rahul Gandhi held a majority stake in YIL, leading to allegations that they used party funds to gain control of AJL's valuable properties.

The ED's investigation, initiated in 2014, focused on the financial transactions between the Congress party, AJL, and YIL.

The agency alleges that the Gandhis and other Congress leaders engaged in a scheme to misappropriate AJL's assets for personal gain.

Recently, the ED has moved to take possession of properties linked to AJL, valued at approximately ₹661 crore, under the Prevention of Money Laundering Act (PMLA).

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