Rahul Gandhi’s lawyer Today (July 5) told the court that Congress was trying to save the historic National Herald, not sell its assets. He argued that the case is about reviving a legacy, not making profit.
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NEW DELHI: Senior advocate R S Cheema, who appeared for Congress leader Rahul Gandhi, told the court that the All India Congress Committee (AICC) was not trying to sell any property of Associated Journals Limited (AJL).
Instead, he said, the Congress party was trying to protect and revive a historic institution that was closely linked with India’s freedom struggle.
Cheema presented his arguments before Special Judge Vishal Gogne of Delhi’s Rouse Avenue Court in response to the case being handled by the Enforcement Directorate (ED).
The ED has accused senior Congress leaders Sonia Gandhi and Rahul Gandhi, along with the late Motilal Vora and Oscar Fernandes, and also Suman Dubey, Sam Pitroda, and the company Young Indian, of conspiracy and money laundering.
The ED said that the group wrongly took over properties worth more than Rs 2,000 crore that belonged to AJL, the company which used to publish the National Herald newspaper.
Cheema questioned the ED’s evidence and said:
“Can my friend (ED counsel) tell me why they were shy of placing the Memorandum of Association (MoA) of AJL?”
He reminded the court about AJL’s origin and its role in India’s history:
“AJL was established in 1937 by Jawaharlal Nehru, J. B. Kripalani, Rafi Ahmed Kidwai, and others.”
Cheema explained that AJL was never a commercial company and always worked based on the policies of the Indian National Congress:
“The AJL MoA said that the policy of AJL will be the policy of the INC. All through, AJL did not have profits. In the post-independence period, it was never a commercial institution.”
He added that the Congress party was not interested in making money from AJL, but only wanted to revive the institution that played a big role in India’s history:
“We (All India Congress Committee) were trying to retrieve an institution which is part of the freedom movement heritage. The problem was not recovering the loan (given to AJL); the problem was to revive it, to see that it comes back on the rails. AICC was not looking for profit from sales. This is a squinted version.”
According to the ED, the Gandhis owned 76% of the shares in Young Indian, which was used to take control of AJL’s assets in exchange for a Rs 90 crore loan. The ED claims this was a fraudulent act.
A day earlier, on Friday, senior advocate Abhishek Manu Singhvi had finished his arguments on behalf of Sonia Gandhi.
Earlier on July 3, advocate Raju argued that the Gandhis were the “beneficial owners” of Young Indian and got full control over it after the other shareholders passed away.
The ED has filed a chargesheet under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA), which deal with money laundering and its punishment. The names mentioned in the chargesheet include Suman Dubey, Sam Pitroda, Sunil Bhandari, Young Indian, and Dotex Merchandise Private Limited.
YESTERDAY IN DELHI COURT
In the National Herald money laundering case, senior advocate Abhishek Manu Singhvi, who appeared on behalf of Congress leader Sonia Gandhi, on Friday (July 4) strongly criticized the case filed by the Enforcement Directorate (ED).
Singhvi said the whole matter was “very unusual” and questioned the legal basis of the allegations made by ED.
“This is truly a strange case. More than strange. Unprecedented. This is an alleged case of money laundering, without any property, without use or projection of property,”
-Singhvi told the court, emphasizing that the case lacks the basic elements usually seen in a money laundering case.
This statement came after Additional Solicitor General S V Raju, who was appearing for the ED, completed his arguments on July 3, focusing on whether the court can legally take notice (cognisance) of the chargesheet filed.
The ED has accused several top Congress figures, including Sonia Gandhi, Rahul Gandhi, and late Congress leaders Motilal Vora and Oscar Fernandes, along with Suman Dubey, Sam Pitroda, and a private company Young Indian, of being involved in a conspiracy to illegally take over properties worth more than Rs 2,000 crore.
These properties originally belonged to Associated Journals Limited (AJL), which is known for publishing the historic National Herald newspaper.
According to the ED, the Gandhis owned 76% of shares in Young Indian, and they allegedly used this company to fraudulently take control of AJL’s properties. The ED claims that this was done in exchange for a loan of Rs 90 crore, calling it a misuse of funds.
In response to these allegations, Singhvi explained to the court that the main intention of the move was to make AJL debt-free, not for personal gain.
“Every company is entitled under law and does, every day, make their companies get free by a variety of instruments. So you take away the debt and assign it to another entity. So this company becomes debt free,”
-Singhvi explained, defending the restructuring as a common and legal business strategy.
He also pointed out that Young Indian is a non-profit company, which means it does not work to earn profits for its shareholders.
“Means it cannot give dividends, it cannot give perks, it cannot give salaries, it cannot give those bonuses. It can give nothing,”
-Singhvi stressed, highlighting that no personal or financial gain was possible for the Gandhis or others involved through this company.
Criticizing the ED’s actions further, Singhvi said the agency stayed inactive for many years and then suddenly acted based on a private complaint. He suggested this shows political bias and misuse of legal process.
“They are, obviously people associated with the Congress. To have the National Herald in a body not associated with the Congress would be worse than having Hamlet without the Prince of Denmark,”
-Singhvi said, comparing the situation to a Shakespearean tragedy missing its main character.
He also argued that the current court does not have jurisdiction to even hear the case, raising serious legal questions about the process being followed.
Previously, on July 3, ASG Raju told the court that Sonia and Rahul Gandhi were the “beneficial owners” of Young Indian, and that they got complete control over the company after the death of other shareholders.
The ED has filed its detailed chargesheet under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA), which deal with the crime of money laundering and its punishment.
Other names mentioned in the chargesheet include Suman Dubey, Sam Pitroda, Sunil Bhandari, Young Indian, and Dotex Merchandise Private Limited.
DAY BEFORE YESTERDAY IN DELHI COURT
In the National Herald case, the Enforcement Directorate (ED) on July 3 informed a Delhi’s Rouse Avenue Court on Thursday that the company Young Indian, whose majority owners are Sonia Gandhi and Rahul Gandhi, was only another name for the Congress Party and was made to hide the party’s involvement in the case.
According to the ED, Young Indian fraudulently took over properties worth Rs 2,000 crore belonging to Associated Journals Limited (AJL). AJL was the publisher of the National Herald newspaper.
ALSO READ: National Herald Case | ED Tells Court “Prima Facie” Case Made Against Sonia, Rahul Gandhi
In return, Young Indian only paid Rs 90 crore as a loan, which has raised serious concerns about how the transaction was done.
On the second day of the hearing in this case, Additional Solicitor General (ASG) SV Raju, who is appearing on behalf of the ED, told the court that this is a “classic case of money laundering”.
ASG Raju said,
“Young Indian was another face of Congress. It was created to avoid the limelight on a national party. Sonia Gandhi and Rahul Gandhi are holding 100% of Young Indian as other shareholders have died.”
The ED believes that the real reason for creating Young Indian was not business or charity, but only to silently take control of AJL’s massive property worth Rs 2,000 crore, which originally belonged to the National Herald newspaper group.
The loan amount of Rs 90 crore shown in the books, the ED argues, was just a way to cover up the real purpose.
“I completed my arguments subject to my rejoinder. The other side was to argue at 2:30 PM, but it was inconvenient, so they’ve asked them till tomorrow. It’s an open and shut case. Young Indian was used for the purpose of usurping properties worth almost Rs 2,000 crores of AJL, and that’s our case, and it is documented. It’s an open and shut case.”
-ASG S V Raju said today to the media after the hearing.
On July 2, The Enforcement Directorate (ED) told a Delhi court that Congress leaders Sonia Gandhi and Rahul Gandhi took full control of Associated Journals Limited (AJL), the company that publishes the National Herald newspaper, by paying just Rs 50 lakh, while the company’s real estate is worth over Rs 2,000 crore.
The statement was made by Additional Solicitor General (ASG) SV Raju before Special Judge (PC Act) Vishal Gogne at Delhi’s Rouse Avenue Court.
The court is currently hearing whether it should take official notice of the ED’s prosecution complaint in the National Herald money laundering case.
ASG Raju informed the court that AJL owns valuable properties across several cities including Delhi, Lucknow, Bhopal, Indore, Panchkula, and Patna.
He stated that these properties were originally given by the Central and State governments after 1947 for the purpose of newspaper printing and publishing.
He said that after Young Indian, a company controlled by the Gandhi family, took over AJL, they declared that they would not be continuing with any kind of newspaper publishing, including the National Herald.
ASG Raju quoted this by saying,
“To take over the entire company of Rs 2000 crores, they paid Rs 50 lakhs.”
He also claimed that after the takeover, individuals close to Sonia and Rahul Gandhi were made directors of AJL, and fraudulent financial transactions were carried out to shift the company’s money improperly.
The court was told that the case involves serious allegations, including that the Congress party had given a Rs 90-crore loan to AJL, which was later transferred to Young Indian for only Rs 50 lakh.
According to the ED, this resulted in the Gandhi family’s company getting control over properties worth more than Rs 2,000 crore, without paying a fair amount.
ASG Raju highlighted,
“AJL owns properties in Delhi, Lucknow, Bhopal, Indore, Panchkula, Patna and other places, and all these properties have been provided by the Central government and various State governments after 1947 for newspaper printing and publishing.”
He also told the court that,
“Soon after taking over AJL, Young Indian (an entity controlled by the Gandhis) declared that it would not indulge in any newspaper publishing including the National Herald.”
In summary, the ED believes that a large real estate asset owned by AJL was taken over at an extremely low cost, through unfair and dishonest means.
The agency has filed a prosecution complaint against Sonia Gandhi, Rahul Gandhi, Sam Pitroda, and others involved.
The legal issue began when former Union Minister Subramanian Swamy filed a private complaint accusing Sonia Gandhi, Rahul Gandhi, Motilal Vora, Oscar Fernandes, Suman Dubey, Sam Pitroda, and Young Indian of cheating, criminal conspiracy, breach of trust, and misusing property.
Background of the Case
The National Herald case revolves around the alleged misuse of funds and property by senior Congress leaders, including Sonia Gandhi and Rahul Gandhi. The controversy began when the Congress party gave a loan of Rs 90 crore to Associated Journals Limited (AJL), the company that originally published the National Herald newspaper.
AJL had stopped publishing the paper years earlier but continued to own valuable real estate across India, which had been allotted to it by the government for press-related activities.
In 2010, a new company named Young Indian Pvt Ltd was incorporated, with Sonia Gandhi and Rahul Gandhi holding majority shares.
AJL’s debt of Rs 90 crore was later assigned to Young Indian for just Rs 50 lakh, effectively giving Young Indian control over all of AJL’s assets, which were worth over Rs 2,000 crore.
This transaction raised serious questions about financial irregularities and alleged misappropriation of assets. In 2012, former Union Minister Subramanian Swamy filed a private complaint, accusing the Gandhis and others of criminal conspiracy, cheating, and breach of trust.
The case was taken up for investigation under the Prevention of Money Laundering Act (PMLA) by the Enforcement Directorate (ED), which claims the transaction was a deliberate attempt to gain control of prime properties through unlawful means.
Case Title:
Enforcement Directorate v. Young Indian and Others
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