National Herald: Delhi Court Begins Hearing ED’s Money Laundering Case

Additional Solicitor General (ASG) S.V. Raju, appearing for the ED, opened the submissions by asserting that a prima facie offence of money laundering is made out against the accused. He said the case involves generation of proceeds of crime through continuous criminal activity, which satisfies the ingredients of the offence under the Prevention of Money Laundering Act (PMLA).

ASG Raju submitted that the complaint, filed under Sections 44 and 45 of the PMLA, has been lodged against seven accused persons, including Sonia Gandhi, Rahul Gandhi, Sam Pitroda, Suman Dubey, and Young Indian. He also informed the Court that property attachments in the case were made in November 2023, and until then, the accused continued to enjoy the proceeds of crime.

Special Judge Vishal Gogne of Rouse Avenue Court listed the matter for day-to-day hearing between July 2 and July 8.

The Court fixed the July dates after the defence counsel requested time citing the voluminous nature of the documents involved, amounting to nearly 5,000 pages.

During the hearing, the Court raised critical questions regarding the ownership of assets held by Associated Journals Limited (AJL), a key entity in the case. Specifically, the judge asked whether AJL's shareholders owned its assets or if they were owned by the company itself.

Special Counsel for the ED, Zoheb Hossain, responded by referring to the predicate offence, claiming that Congress party donors had been misled, donations intended for political activities were allegedly diverted to fund a loan to AJL, which was engaged in commercial operations.

In response to a Court query about the ownership of assets and whether they could become “proceeds of crime” if originally held lawfully, Hossain explained that the alleged criminal conspiracy involved the manipulation of AJL, Young Indian, and the All India Congress Committee (AICC).

ASG Raju and Hossain contended that Young Indian was created as a “sham” or “cloak” to enable the conversion of public funds into personal assets and gain control over AJL’s assets worth approximately Rs. 2,000 crore. ASG Raju read from an earlier summoning order, highlighting that the accused acted in concert to achieve this alleged fraudulent objective.

Hossain also submitted that the rental income of Rs. 142 crore received through these assets forms part of the proceeds of crime. He further informed the court that Sonia and Rahul Gandhi collectively held 76% of shares in Young Indian and that by paying just Rs. 50 lakh to AJL, Young Indian acquired Rs. 90.25 crore worth of debt, a move the ED considers central to the alleged offence of cheating and breach of trust.

The Court was also informed that the predicate offence has already been taken cognisance of by a competent court.

According to the ED, Congress donors were deceived, as party office bearers extended loans to a commercial entity, AJL which was not the intended purpose of public donations.

Senior Advocate Abhishek Manu Singhvi, appearing for the Gandhis, requested more time to prepare arguments due to the volume of documentation.

However, the Court emphasized that since the matter is before a special MP/MLA Court, hearings would proceed on a weekly basis.

The Judge clarified that the defence will be heard after the ED concludes its submissions.

The ED has recently filed its prosecution complaint in the case, and the matter now stands posted for further arguments beginning July 2.

Previously

It is to be noted that on May 8, the Delhi Court had adjourned proceedings in the case. “Since the notice has purportedly been served upon an alternative email ID upon the proposed accused 4 (Sam Pitroda) only today, it is appropriate that submissions on the aspect of cognisance are heard on the next date of hearing,” the Court had observed.

On May 2, the Delhi Court had issued notices to Congress leaders Sonia Gandhi and Rahul Gandhi in the National Herald money laundering case, observing that their “right to be heard at any stage breathes life into a fair trial.” The Special Judge of Rouse Avenue Court had noted that the right of the accused to present their side was available at the time of cognisance of the chargesheet filed by the Enforcement Directorate (ED).

Background

The ED had recently filed its prosecution complaint (chargesheet) in the case, which stems from a private criminal complaint originally filed by BJP leader Dr. Subramanian Swamy before a magistrate court on June 26, 2014. That complaint prompted the initiation of the financial probe in 2021, with the ED alleging large-scale money laundering involving key Congress figures.

According to the ED, the case involves a “criminal conspiracy” in the alleged fraudulent takeover of assets worth over Rs. 2,000 crore belonging to Associated Journals Limited (AJL), the publisher of the now-defunct National Herald newspaper. Among those named in the conspiracy are Congress Parliamentary Party Chairperson Sonia Gandhi, her son and senior party leader Rahul Gandhi, the late Congress leaders Motilal Vora and Oscar Fernandes, as well as Suman Dubey, technocrat Sam Pitroda, and the private company Young Indian.

The central agency has alleged that Young Indian, a company formed in 2010, acquired 100% of AJL's shares through a series of transactions that involved financial irregularities and violations under the Prevention of Money Laundering Act (PMLA). Sonia Gandhi and Rahul Gandhi each hold a 38% stake in Young Indian, effectively giving them majority control. The ED has accused the Congress leadership of misusing party funds and instrumentalising Young Indian to acquire valuable AJL properties, originally intended for journalistic purposes, for commercial benefit. As part of its investigation, the ED had previously summoned and questioned both Sonia Gandhi and Rahul Gandhi for several hours.

With the issuance of notice, the Delhi court has now formally involved the Gandhis in the current stage of proceedings, where the ED's chargesheet awaits judicial consideration. The court's order reinforces the importance of adhering to principles of natural justice by ensuring that the accused are given an opportunity to be heard before any further action is taken. The matter will be heard again on May 8.

Case Title: Directorate of Enforcement v. Sonia Gandhi & Ors.

[Inputs: ANI]