The Delhi High Court on Monday heard a plea filed by the Enforcement Directorate (ED) challenging a trial court order refusing to take cognisance of the chargesheet filed against Congress leaders Sonia Gandhi and Rahul Gandhi in the alleged National Herald case.

The ED argued that a private complaint alleging commission of a scheduled offence can form the basis for initiating a money laundering investigation under the Prevention of Money Laundering Act (PMLA), even in the absence of a First Information Report (FIR).

Appearing for the ED, Additional Solicitor General SV Raju submitted before Justice Sachin Datta that the law does not distinguish between a scheduled offence originating from an FIR and one brought before a Magistrate through a private complaint.

He argued that once a competent court takes cognisance of the scheduled offence on a private complaint, the ED can proceed under the PMLA.

The submissions were made in the ED's challenge to a December 16, 2025 order of the Special Court, which had declined to take cognisance of the agency's prosecution complaint against Congress leaders Sonia Gandhi and Rahul Gandhi and others in the National Herald money laundering case.

The Special Court had held that the ED's prosecution complaint was not maintainable as the predicate offence was founded on a private complaint filed by BJP leader Subramanian Swamy and not an FIR.

The court, however, had left open the possibility of further investigation by the ED in light of a subsequent FIR registered by the Delhi Police's Economic Offences Wing (EOW).

During Monday's hearing, Justice Datta repeatedly questioned the ED's position on whether the mere filing of a private complaint could trigger a money laundering investigation, and whether the subsequent registration of an FIR could be relied upon to sustain the agency's original proceedings.

'At What Point Would A Private Complaint Be Enough?': Delhi HC Questions ED

Raju argued that there was no legal basis to create a distinction between a scheduled offence reported through an FIR and one brought to the notice of a Magistrate through a private complaint. He relied on the Supreme Court's judgment in A.R. Antulay v. Ramdas Sriniwas Nayak, submitting that any person can set the criminal law in motion.

He further contended that a Magistrate taking cognisance of a private complaint applies judicial mind to the allegations, which, according to him, places such a complaint on a "higher footing" than an FIR that is yet to be investigated.

Relying on the Supreme Court's decision in Vijay Madanlal Choudhary, ASG Raju submitted that the PMLA does not require the predicate offence to originate exclusively from an FIR. He also referred to Section 44 of the PMLA to support the agency's position.

Raju argued that the filing of a private complaint disclosing a scheduled offence could be sufficient to set the PMLA machinery in motion, unless the complaint was dismissed by the competent court. He submitted that the ED need not wait for the conclusion of proceedings relating to the scheduled offence before commencing its own investigation.

Justice Datta, however, questioned the statutory basis for this interpretation. "At what point would a private complaint be enough?" the judge asked. He further sought to know whether, according to the ED, the mere filing of a complaint was sufficient, irrespective of whether the Magistrate had taken cognisance of it.

"According to you, mere filing of a complaint is sufficient, whether or not cognisance is taken or not? But from where do you get that? There's no statutory guidance" the judge observed.

Raju maintained that the PMLA investigation could continue even while proceedings concerning the scheduled offence were pending. He submitted that if the accused were ultimately acquitted, or the predicate proceedings were quashed or terminated, the consequences for the money laundering case could be considered at that stage.

'If Complaint Suffices, Why Rely On FIR?': Court Questions ED's Stand

Another significant aspect of the hearing concerned the ED's reliance on a subsequent FIR registered by the EOW.

Justice Datta asked Raju whether the agency was relying on the original private complaint or the subsequent FIR to sustain its proceedings.

"Today, what's your stance? Would you rather hit yourself with a complaint or with the FIR?" the judge asked.

Raju responded that the ED stood by both. He submitted that the agency's original proceedings were based on the private complaint and that the subsequent FIR provided an additional basis for the investigation.

The judge, however, questioned why the agency needed to rely on the FIR if it maintained that a private complaint was independently sufficient to trigger proceedings under the PMLA.

"If the complaint suffices, why would you need to rely upon the FIR then?" Justice Datta asked.

The judge also questioned whether the ED could now rely on a ground that it had not pursued before the Special Court.

In this context, Justice Datta posed a question on whether the subsequent FIR could revive the original prosecution complaint if the Special Court's legal reasoning was ultimately found to be correct.

"Would the FIR, assuming the impugned order is right, infuse life into a complaint which is still born?" he asked.

The judge clarified that he would examine the ED's challenge in light of its original position that the proceedings had been initiated on the basis of a private complaint. The subsequent FIR, he indicated, would not necessarily determine the legality of the original action.

ED Says Trial Court's Approach Creates Artificial Distinction

Raju argued that accepting the Special Court's reasoning would create an artificial classification among scheduled offences under the PMLA.

He submitted that such an interpretation would allow persons accused of money laundering to escape the statutory framework merely because the predicate offence had been brought to the Magistrate's notice by a private individual rather than through an FIR.

“Many persons who have laundered money, many money persons who are involved in money laundering of thousands of crores, will go scot-free and will not be amenable to the process of the PMLA Act. And the purpose of the PMLA Act will be frustrated” he argued.

ASG Raju contended that the PMLA was intended to deal with the proceeds of crime and that its operation could not be restricted by the manner in which information about the scheduled offence initially reached the criminal justice system.

On the issue of the ED's internal notings and its position before international bodies, Raju argued that such material could not determine the interpretation of the statute.

Justice Datta agreed with the submission that internal departmental notings could not govern the legal position.

"Nobody can rely upon internal noting of ED in any matter," the judge observed, adding that internal discussions within the agency could not lay down the law.

The hearing also saw an exchange on the relevance of the Financial Action Task Force (FATF) framework. Raju submitted that the agency's position before FATF or its reports could not be treated as determinative of the legal issue before the High Court.

Justice Datta observed that an agency might adopt a particular position before an international body for different considerations, but such a position could not be generalised and imported into the specific allegations in the present prosecution complaint.

Background

The National Herald case arises from allegations concerning the acquisition of control over Associated Journals Limited (AJL), the publisher of the National Herald newspaper, through Young Indian Pvt Ltd.

The ED has alleged that Sonia Gandhi and Rahul Gandhi, along with other accused, were involved in a conspiracy to acquire AJL's assets through Young Indian. The agency has alleged that the transactions involved proceeds of crime and has attached assets worth approximately ₹752 crore.

The case originated from a private complaint filed by Swamy in 2012, alleging cheating, criminal conspiracy and misappropriation in connection with the affairs of AJL and Young Indian.

The ED registered an Enforcement Case Information Report (ECIR) in June 2021 and subsequently filed its prosecution complaint on April 15, 2025.

On December 16, 2025, the Special Court declined to take cognisance of the ED's complaint, holding that the agency's proceedings could not be founded on a private complaint and the consequential summoning order in the scheduled offence, in the absence of an FIR.

Sonia Gandhi and Rahul Gandhi have opposed the ED's challenge before the High Court, contending that the agency cannot initiate PMLA proceedings on the basis of a private complaint.

They have also argued that the present case is an exceptional instance in which the ED has proceeded on such a basis, contrary to its own earlier position on the requirement of an FIR.

After hearing Raju's submissions, the High Court listed the matter for further hearing on November 23 at 2:30 PM.

The judge indicated that the other side would be heard after the court vacation and asked the parties to file written submissions to facilitate the hearing.