Why a Delhi court dismissed Enforcement Directorate’s National Herald chargesheet against Gandhis

Eight months ago, the Enforcement Directorate had filed a chargesheet against Congress leaders Sonia Gandhi and Rahul Gandhi alleging that they had fraudulently taken over The Associated Journals Limited, publisher of the National Herald newspaper.

On Tuesday, a special judge of the Rouse Avenue court in Delhi dismissed the complaint, once again shedding light on the patchy record of one of India’s premier investigative agencies as well as the political weaponisation of the Prevention of Money Laundering Act.

The court refused to take cognisance of the chargesheet, given that the Enforcement Directorate’s money laundering case against the Gandhis and their associates was not based on a first information report, as is usually the case with such investigations.

The Congress party’s legal advisors have long complained that the agency’s National Herald probe is one of a kind. The Enforcement Directorate can only step in, they say, after another investigating agency has initiated a case against an accused, and that too in one of the offences listed in the Prevention of Money Laundering Act, 2002.

In the agency’s parlance, these are called scheduled offences. For example, the Enforcement Directorate case against Jharkhand Chief Minister Hemant Soren was based on a 2023 FIR registered by Ranchi police in a case allegedly involving land grab.

In the National Herald case, not only did the Enforcement Directorate initiate a money-laundering investigation without a pre-existing FIR, but it also took sweeping action. Only in April, the agency had sought possession of the newspaper’s assets in Delhi, Mumbai and Lucknow that were valued at Rs 661 crores.

Back then, the Congress party had organised nationwide protests against what it saw as the wrongful targeting of its first family, the Gandhis. On Tuesday, the grand old party was quick to declare victory.

“Truth has prevailed, and truth will always prevail,” it said in a press release. “The BJP government has relentlessly targeted the Gandhi family… but the Gandhi family will never bow down, because they stand firmly with the truth.”

At a news conference in Delhi, Pawan Khera, chairman of media and publicity for the party, also chided the Enforcement Directorate and other government agencies for functioning as the “private army” of the BJP. The Enforcement Directorate has yet to release an official statement about the court ruling.

Case file

The National Herald saga can be traced back to a February 2013 complaint that Bharatiya Janata Party leader Subramanian Swamy made before a Delhi court.

Swamy alleged that the Gandhis had wrongly acquired control of National Herald’s assets, which he claimed were worth thousands of crores. In doing so, he contended, the Gandhis had cheated shareholders of The Associated Journals Limited, the company that owns National Herald, as well as the Congress party.

The Associated Journals Limited was incorporated in Lucknow in 1937 to help Jawaharlal Nehru and other Congress leaders publish newspapers that could carry their point of view to readers. It began by publishing the National Herald in English and eventually started publishing Qaumi Awaaz in Urdu and Navjivan in Hindi as well.

In the years after Independence, various governments across the country leased land to the company to facilitate its operations. But by the turn of the century, The Associated Journals Limited was struggling to stay afloat and pay its staff. That is when the Congress party came to its aid, extending loans of about Rs 90 crores to keep it going.

Even so, the company had to stop publishing the National Herald in 2008 as its managing director Motilal Vora, a former treasurer of the Congress party, took up the task of restructuring it. A nonprofit company called Young Indian was floated in 2010 and the Gandhis became its directors.

This company bought out the Congress party’s loans worth Rs 90 crore for the measly sum of Rs 50 lakhs and converted the debt into shares with approval from The Associated Journals Limited in 2011. That is how Young Indian became the holding company with effective control over the properties of National Herald and its sister publications.

In his complaint, Swamy alleged that Young Indian had defrauded both the publisher as well as the party by acquiring the debt and converting it into shares. While the complaint, like much of what Swamy used to say then, elicited media attention, it did not lead to any serious investigation against the Gandhis till 2021, when the Enforcement Directorate entered the picture.

In 2022, soon after it began its money-laundering probe, the Enforcement Directorate questioned Sonia Gandhi and Rahul Gandhi for days on end. A year later, it attached the National Herald’s assets worth Rs 751 crores. And finally, in April, it filed a chargesheet in the case.

‘Truth has triumphed’

Congress leaders have consistently argued that there was nothing out of the ordinary about how Young Indian acquired control of The Associated Journals Limited. The arrangement was necessitated, they explain, because of the publishing company’s inability to repay its debts. Moreover, they point to how Motilal Vora’s efforts led to the revival of the National Herald and the other publications that had become defunct.

Crucially, nothing in the case seems to suggest that any money or properties changed hands. The Associated Journals Limited continues to use the money it generates from its assets to publish papers and pay its staff. Its assets remain its own and have not been transferred to Young Indian, let alone to the Gandhis.

This, according to Congress leaders, shows that nothing was done with the intent of drawing any undue commercial benefit. The sole purpose of the restructuring, they say, was to revive a legacy institution of the party.

They also liken the ruling dispensation’s attacks on the National Herald to the colonial government’s ban on the paper during the Quit India movement.

The Gandhis, for their part, have tried to derive political mileage out of the Enforcement Directorate case. In his public speeches, Rahul Gandhi frequently brings up the experience of enduring hours of questioning from government officials.

“There is nothing of substance in this National Herald case,” Wayanad MP Priyanka Gandhi told reporters outside the parliament on Tuesday.

But the court case may not be over just yet. While the judge did not entertain the chargesheet, he did allow the Enforcement Directorate to present its arguments at the next hearing. At the news conference, Muhammad Khan, secretary of the Congress party’s legal department, said that his team will now try to get the case dismissed.

However, an FIR registered by the Delhi police’s Economic Offences Wing this October has sparked speculation that the agency may use it to keep the case alive. To do so, the Enforcement Directorate will have to reconduct its whole investigation, this time based on the new FIR, Hindustan Times reported citing unnamed Enforcement Directorate officials. The agency also plans to challenge the court ruling, the report said.

For now, though, the Congress is claiming that the court order has vindicated its position. Stories about virtually every little detail of the case populated the home page of National Herald’s website on Tuesday. Three particular words in the headline of the cover story stood out: “Truth has triumphed.”