A Delhi special court on Tuesday set aside the Enforcement Directorate’s prosecution complaint in the National Herald matter, ruling that the agency failed to establish the basic legal precondition required under the Prevention of Money Laundering Act (PMLA). The court held that without a registered scheduled or predicate offence, proceedings against Sonia Gandhi, Rahul Gandhi, and other accused could not be sustained.
The decision effectively brings to a pause a legal battle that has remained politically charged for more than ten years.
Origins of the Dispute
The controversy dates back to 2008, when Associated Journals Limited (AJL), which published the National Herald newspaper, shut down operations while continuing to hold prime real estate assets in several Indian cities. To manage AJL’s financial liabilities, the Congress party is stated to have extended interest-free loans amounting to approximately ₹90 crore.
Two years later, in 2010, Young Indian Private Limited was formed and subsequently acquired complete ownership of AJL by taking over the outstanding loan in exchange for a consideration of ₹50 lakh. The transaction attracted scrutiny as AJL’s properties were valued at more than ₹750 crore. Sonia Gandhi and Rahul Gandhi each held 38 percent shares in Young Indian, while the remaining stake was held by Motilal Vora and Oscar Fernandes.
Legal and Investigative Developments
In 2011, BJP leader Subramanian Swamy filed a private complaint alleging cheating, criminal breach of trust, and misappropriation in the transfer of AJL’s ownership. The Delhi High Court issued notices to Sonia and Rahul Gandhi the following year, setting judicial proceedings in motion.
The Income Tax Department examined the transaction in 2014, raising questions over Young Indian’s claim of charitable status and noting that its shareholders appeared to have benefited from the arrangement. In 2015, a trial court summoned the accused, who later appeared before the court and were granted bail in 2016 and 2017.
Internal ED Note and Subsequent Probe
In 2014, an internal assessment by the Enforcement Directorate gained significance when then Joint Director Himanshu Lal recorded that a money laundering investigation could not be legally initiated in the absence of a registered predicate offence. He asked CBI to register FIR but no one paid attention to this technical issue. And despite this internal view, the ED registered a PMLA case in 2018, relying on findings of the Income Tax Department and the private complaint. Over the years, several individuals were questioned, including former Union Minister Pawan Bansal. Rahul Gandhi was interrogated for multiple days in 2022, followed by extensive questioning of Sonia Gandhi.
Property Attachment and Final Ruling
In 2023, the ED provisionally attached AJL properties valued at over ₹750 crore and conducted searches in Delhi and Mumbai. A fresh prosecution complaint was filed in early 2024 naming senior Congress leaders as accused.
In 2025, however, the special Delhi court dismissed the ED’s complaint, holding that the statutory requirement of establishing a scheduled offence under PMLA had not been met. With this ruling, the money laundering proceedings in the National Herald case stand halted, while the earlier legal assessment made by former ED Joint Director Himanshu Lal has effectively been vindicated.
