In a significant setback to the Enforcement Directorate (ED), a Delhi court on Tuesday dismissed the agency’s complaint in the long-running National Herald case, granting immediate relief to Congress leaders Sonia Gandhi and Rahul Gandhi. The order halts, for now, the ED’s attempt to prosecute the Gandhis for alleged money laundering linked to the takeover of Associated Journals Limited (AJL).
Special Judge (PC Act) Vishal Gogne of the Rouse Avenue Court said the complaint filed by the ED under the Prevention of Money Laundering Act (PMLA) was not maintainable as the case was based on a private complaint filed by Subramanian Swamy and the magistrate’s summoning orders, and not on any First Information Report (FIR).
While the order does not amount to a clean chit, it significantly weakens the ED’s prosecutorial momentum in one of its most politically sensitive cases.
The ED had filed a fresh prosecution complaint against Rahul Gandhi and Sonia Gandhi under Sections 44 of the PMLA for the commission of the offence of money laundering as defined under Section 3, read with Section 70 and punishable under Section 4 of PMLA, 2002.
In another development, the court has ruled that Rahul Gandhi, Sonia Gandhi, and other accused in the National Herald case are not entitled to a copy of the FIR, in proceedings arising from a fresh FIR registered by Delhi Police’s Economic Offences Wing (EOW) in the case.
What the court said
The Delhi court ruled that the ED’s complaint did not meet the threshold required to proceed under the Prevention of Money Laundering Act (PMLA). At the heart of the court’s reasoning was the absence of a clearly demonstrable proceeds of crime, a mandatory prerequisite under the PMLA.
The ED’s case was built on the allegation that Young Indian Private Limited, in which Sonia and Rahul Gandhi are majority shareholders, acquired control of AJL and its assets, estimated to be worth several thousand crore rupees, through a sham transaction.
Legal experts point out that courts have increasingly insisted on a strict interpretation of PMLA requirements, especially after several Supreme Court rulings emphasising that money laundering cannot exist in the absence of a clearly identifiable predicate offence and illegal gains arising from it.
A blow to the ED’s narrative
The dismissal is politically and institutionally significant. However, the court’s order underscores a recurring judicial concern that investigative agencies cannot rely on broad allegations of impropriety without establishing the basic legal ingredients of economic offences.
The ED, meanwhile, retains the option to challenge the dismissal before a higher court. Given the political salience of the case and the agency’s track record, an appeal is widely expected. Whether a higher court takes a different view will depend largely on whether the ED can plug the legal gaps identified by the trial court.
Larger implications
Beyond the immediate relief to Sonia and Rahul Gandhi, the order carries broader implications for economic offence jurisprudence. It reinforces the idea that PMLA prosecutions cannot be sustained merely on suspicion or political optics; they require rigorous proof of criminal proceeds and laundering activity.
As the legal battle moves to its next chapter, the National Herald case continues to sit at the uneasy intersection of law, politics, and power, where outcomes resonate far beyond the courtroom.