National Herald corruption case

The National Herald corruption case is the ongoing case in a Delhi court filed by Indian economist and politician Subramanian Swamy against politicians Sonia Gandhi and Rahul Gandhi, their companies and associated persons.[1] As per the complaint filed in the court of the Metropolitan Magistrate, Associated Journals Limited (AJL) took an interest-free loan of ₹90.25 crore (US$13 million) from Indian National Congress. It is alleged that the loan was not repaid.[2] A closely held company, Young Indian, was incorporated in November 2010 with a capital of ₹50 lakh (US$70,000) and it acquired almost all the shareholding of AJL and all its properties (alleged to be worth ₹5,000 crore (US$700 million)).[3] Swamy alleged criminal misappropriation by both Sonia Gandhi and Rahul Gandhi. The courts have determined that a prima facie case has been established in the matter. In May 2019, the Enforcement Directorate permanently attached properties worth Rs.64 crore involved in the case.[4]

Associated Journals Limited

Associated Journals Limited (AJL) is an unlisted public company limited by shares, incorporated on 20 November 1937, with its registered office at Herald House, 5-A, Bahadur Shah Zafar Marg, New Delhi. It was the brainchild of Jawaharlal Nehru but it was never his personal property as it was started with the support of about 5,000 freedom fighters who became shareholders of AJL. The company's capital was ₹5 lakh (US$7,000) divided into 2,000 preferential shares worth ₹100 (US$1.40) each and 30,000 ordinary (equity) shares worth ₹10 (14¢ US) each. Apart from Nehru, AJL's Memorandum of Association was signed by stalwarts such as Purushottam Das Tandon, Acharya Narendra Dev, Kailash Nath Katju, Rafi Ahmad Kidwai, Krishna Dutt Paliwal and Govind Ballabh Pant. The company did not belong to any particular person, nor did it want to be associated with any business except news. AJL had 1,057 shareholders as of 29 September 2010[5] as per the annual return filed by the company with the Registrar of Companies.

Motilal Vora has been the chairman and managing director of AJL since 22 March 2002.[6][7] The company had incurred losses[5] before its holdings were transferred to Young India in 2011.[8][9]

AJL published the National Herald newspaper in English, Qaumi Awaz in Urdu and Navjeevan in Hindi until 2008. AJL also owns real estate property in various cities including New Delhi, Lucknow, Bhopal, Mumbai, Indore, Patna and Panchkula.[3][6] The value of the real estate owned by AJL is estimated to be at ₹50 billion (US$700 million).[3] The properties of AJL include Herald House, a six-storey building with around 10,000 sq metre office space.[10]

On 21 January 2016 the AJL in its meeting in Lucknow decided to relaunch the three dailies, National Herald and its sister publications, Quami Awaz and Navjivan.[11]

Allegations by other shareholders of usurpation of their shares

After the Delhi High Court dismissed the appeal of Sonia Gandhi and others against the summons issued by the trial court, many shareholders of AJL alleged that no notice was served on them by AJL for any meeting of the shareholders and that the shares held by their fathers have been transferred by AJL to Young Indian fraudulently without their consent in December 2010. These shareholders include prominent individuals such as former law minister Shanti Bhushan and former chief justice of Allahabad and Madras High Courts Markandey Katju.[12]

Young Indian

Young Indian is a private company limited by guarantee, incorporated on 23 November 2010 with a capital of ₹5 lakh (US$7,000)[3] and with its registered office at 5A, Herald House, Bahadur Shah Zafar Marg, Delhi. On 13 December 2010, Rahul Gandhi was appointed director of Young Indian while Sonia Gandhi joined the board of directors on 22 January 2011.[6] Of the company's shares, 76 percent are jointly held by Sonia Gandhi and Rahul Gandhi, and the remaining 24 percent are held by Congress leaders Motilal Vora and Oscar Fernandes (12 percent each).[8][13] It is described by Rahul Gandhi's office as a "not-for-profit company" which does have commercial operations.[14]

Case

On 1 November 2012, Subramanian Swamy filed a private complaint in a court in Delhi alleging that both Sonia Gandhi and Rahul Gandhi have committed fraud and land grabbing worth ₹16 billion (US$220 million) by acquiring a publicly limited company called Associated Journals Limited (AJL) through their owned private company, Young Indian.[15] He also claimed that, through this fraud, they had got the publication rights of the National Herald and Qaumi Awaz newspapers, with real estate properties in Delhi and Uttar Pradesh. He alleged that the acquired properties were given by the government only for the purposes of publishing newspapers, but were used for running a passport office with rental income amounting to millions of rupees.[16][17]

His complaint in the court further alleges that, on 26 February 2011, AJL approved the transfer[7] of an unsecured loan of ₹90 crore (US$13 million) from the All India Congress Committee at zero interest with all ninety million (9 crore) of the company's shares of ₹10 (14¢ US) each to Young Indian.[18] Swamy argued that it is illegal for a political party to lend money for commercial purposes as per Section 29A to C of the Representation of the People Act, 1951, and Section 13A of Income-tax Act, 1961, and demanded investigation by the Central Bureau of Investigation (CBI) and the de-recognition of the Indian National Congress party for using public money.[19] On 2 November 2012, the party responded that the loan was given only for reviving the National Herald newspaper with no commercial interest.[20][21][22]

The hearing of the criminal proceedings case was taken up by the magistrate on various dates while the defendants opposed the petition and asked the magistrate to dismiss it.[23][24] The court finally observed that prima facie evidence against all the accused was found. The court issued summons to the defendants to appear in the court to defend themselves against all the allegations made in Swamy's complaint.[25]

On 26 June 2014, Metropolitan Magistrate Ms. Gomati Manocha summoned Sonia Gandhi, Rahul Gandhi, Motilal Vora, Oscar Fernandes, Suman Dubey and Sam_Pitroda to appear in the court on 7 August 2014. She said that according to the evidence so far, "it appears that YIL was in fact created as a sham or a cloak to convert public money to personal use" to acquire control over ₹20 billion (US$280 million) worth of AJL assets. The court noted that all accused persons had allegedly acted "in consortium with each other to achieve the said nefarious purpose/design".[26][27]

Appeal in Delhi High Court and Supreme Court

The defendants appealed in the Delhi High Court against the summons issued by the magistrate.[28][29][30][31] On 1 August 2014, Swamy was served notice to file reply in the High Court.[32] On 28 August 2014, the metropolitan court fixed 9 December 2014 for the next hearing of the case.[33][34] On 12 January 2015, the judge of the Delhi High Court recused himself from hearing the case and directed that the petitions be directed before an appropriate bench.[35]

On 27 January 2015, the Supreme Court of India directed Swamy to make a case for speedy trial in the Delhi High Court which was hearing the appeal of Sonia Gandhi and others against the summons issued to them by the trial court.[36] On plea by Sonia Gandhi and others, defendants requested that the Chief Justice reassign the case to Justice Sunil Gaur, who had recused himself earlier. [37]

On 1 August 2014, the Enforcement Directorate initiated a probe to discover if there was any money laundering in the case.[38] On 18 September 2015, it was reported that the Enforcement Directorate had reopened the investigation.[39]

On 7 December 2015, the Delhi High Court dismissed the appeals of Sonia Gandhi, Rahul Gandhi and five others which included Motilal Vora, Oscar Fernandes, Suman Dubey and Sam Pitroda,[40] and ordered them to appear in person before the trial court on 9 December.[41] The Delhi High Court said in its 7 December 2015 judgment noted "criminal intent."[42]

On 12 February 2016 the Supreme Court granted exemption to all the five accused in the case from personal appearances while refusing to quash proceedings against them.[43][44] Later on 12 July 2016 the Delhi High Court set aside the trial court judgement allowing examination of balance sheets and other documents of Congress party and other two companies, the AJL and Young Indian.[45][46][47] The next hearing in the court is scheduled on 20 August.[48]

Trial in the magistrate's court

On 7 December 2015, the Delhi High Court ordered Sonia Gandhi, Rahul Gandhi and five others to appear in person before the trial court on 9 December. They did not appear in the court and, on their lawyers' request, the trial court ordered them to appear before him in person on 19 December. He disallowed their request for exemption from personal appearance.[49][50] On 19 December 2015 the Patiala House court granted bail to all but one and ordered them to appear in the court on the date of next hearing 20 February 2016.[51][52]

On 11 March 2016 the trial court allowed, after hearing Swamy's plea to examine balance sheets of INC, AJL and Young Indian[53] from 2010 to 2013,[54] which was later overturned by the Delhi High Court.[55]

On 26 May 2018 Subramanian Swamy's application to the trial court seeking a directive for the defendants to verify material filed by Swamy in the National Herald case was denied. [56]

Current status of the case

The Supreme Court allowed the income-tax department to reassess the 2011–12 tax filings of Rahul Gandhi and Sonia Gandhi, even as the Congress leaders await a court verdict on the legality of I-T notices to them.

The top court, however, restrained the department from taking any action against the Congress president and his mother until January 8, 2019, which was the next date of hearing. [57]

In a big blow to the Gandhis, the Enforcement Directorate permanently attached properties worth Rs.64 crore in the National Herald Case in May 2019.[58][59]

See also

References
  1. Gupta, Smita; Jain, Akanksha (27 June 2014), "Delhi court summons Sonia, Rahul in National Herald case", The Hindu
  2. "Section 269T in The Income- Tax Act, 1995", indiankanoon.org, retrieved 8 December 2015
  3. "The nitty-gritty of 'The National Herald' case". The Hindu. 10 December 2015.
  4. Nandini, Navashree (29 May 2019). "Big Blow to Gandhis: ED permanently attaches properties worth Rs 64 crore in National Herald Case". RepublicWorld. Retrieved 2 June 2020.
  5. "National Herald case: Loan write-off, conflict of interest, benefiting takeover by family". The Indian Express. 9 December 2015.
  6. "Deals at National Herald: Who got what, when, how". The Indian Express. 10 December 2015.
  7. "What is the National Herald case all about?". India Today. 8 December 2015.
  8. Real estate at core of Associated Journals controversy, New Delhi/Bangalore: Live Mint, 14 November 2012
  9. Full text: Sonia, Rahul accused of grabbing Rs 1,600 cr property, Firstpost, 1 November 2012
  10. "How National Herald newspaper funds Rahul and Sonia Gandhi's Young Indian", Daily News and Analysis, New Delhi, 2 July 2014
  11. Gupta, Smita (12 July 2016). "Relaunch of National Herald is still a long way off". The Hindu.
  12. AJL did not inform us or obtain approval for equity transfer, say shareholders, The Indian Express, 12 December 2015
  13. What is the National Herald case all about?, India Today, 8 December 2015
  14. "Rahul threatens to sue Subramanian Swamy", The Hindu, 2 November 2012
  15. "CRL.M.C.3332/2014 & Crl.M.A.11550/2014" (PDF). lobis.nic.in. 7 December 2015.
  16. New Delhi, 1 Nov 2012, DHNS (1 November 2012). "Swamy accuses Sonia, Rahul of property fraud". Deccan Herald.CS1 maint: multiple names: authors list (link)
  17. Sanjay Singh (1 November 2012). "Swamy does a Kejriwal, targets Sonia & Rahul for landgrab". Firstpost.
  18. "Rahul threatens to sue Subramanian Swamy". The Hindu. 2 November 2012.
  19. "Swamy seeks Congress' de-recognition; party says Herald emotional issue". Hindustan Times. 3 November 2012. Archived from the original on 13 March 2014.
  20. Smita Gupta (2 November 2012). "Congress to revive National Herald, challenges Swamy to take it to court". The Hindu.
  21. "Swamy to move court against EC". The Hindu. Press Trust of India. 7 November 2012.
  22. "EC orders probe against Rahul Gandhi for 'wrong information' about his assets". Ibnlive.in.com. 17 November 2012.
  23. "Subramanian Swamy's victory against Sonia, Rahul Gandhi". One India. 16 March 2013.
  24. "NATIONAL HERALD ACQUISITION: DELHI COURT SUMMONS ROC TO TESTIFY RECORDS". dailypioneer. 29 April 2014.
  25. "Court summons Sonia Gandhi, Rahul in National Herald land grab case". ZEE NEWS. 26 June 2014.
  26. "What is the National Herald case all about?".
  27. "National Herald case explained: Everything you need to know". The Indian Express. 8 December 2015.
  28. "National Herald case: Delhi HC stays criminal proceedings against Sonia Gandhi, Rahul Gandhi". TIMES OF INDIA. 6 August 2014.
  29. "National Herald case: Relief for Sonia, Rahul, Delhi HC stays summons till August 13". ZEE NEWS. 6 August 2014.
  30. "National Herald case: What you should know". Rediff.com. 9 December 2015.
  31. "National Herald case explained: Everything you need to know". The Indian Express. 10 December 2015.
  32. "National Herald case: Delhi High Court serves notice to Subramanian Swamy". INDIA TODAY. 1 August 2014.
  33. "National Herald case: Delhi trial court to hear case on 9 December". FIRST POST. 28 August 2014.
  34. "Court defers hearing in National Herald case". ONE INDIA. 28 August 2014.
  35. "National Herald case: Judge recuses from hearing Sonia Gandhi, Rahul Gandhi plea". THE INDIAN EXPRESS. 12 January 2015.
  36. "National Herald case: SC directs Subramanian Swamy to approach Delhi HC". FIRST POST. 27 January 2015.
  37. "Congress had opposed transfer of case, insisted on Gaur". The Times of India.
  38. "National Herald case: Trouble for Sonia, Rahul as ED begins preliminary probe". ZEE NEWS. 1 August 2014.
  39. "Enforcement Directorate reopens National Herald case involving Sonia and Rahul Gandhi, which was closed in August". IBN Live. 18 September 2015.
  40. Jeelani, Mehboob; Kumar, Nirnimesh (8 December 2015). "Sonia, Rahul to appear in court on December 19, Congress disrupts Parliament". The Hindu.
  41. "National Herald case: Loan write-off, conflict of interest, benefiting takeover by family". The Indian Express. 9 December 2014.
  42. N Sundaresha Subramanian (12 December 2015). "The mystery of the missing 296 AJL shareholders". Business Standard India.
  43. Rajagopal, Krishnadas (12 February 2016). "National Herald case: SC exempts Gandhis from personal appearance". The Hindu.
  44. "National Herald case: Breather for Sonia, Rahul as SC expunges objectionable parts of HC order". Zee News. 12 February 2016.
  45. "J- 2 PRONOUNCEMENT OF JUDGEMENTS(APPLET. JURISDICTION),1.CRL.M.C 671/2016,2.CRL.M.C. 672/2016, 3.CRL.M.C. 1317/2016, 4. CRL.M.C.1319/2016, 5. CRL.M.C.1321/2016" (PDF). Delhi High Court. 12 July 2016.
  46. "National Herald case: Relief for Sonia, Rahul as HC denies documents to Subramanian Swamy". India Today. 12 July 2016.
  47. India, Press Trust of (12 July 2016). "National Herald case: HC sets aside trial court order summoning documents". Business Standard India. Business Standard.
  48. India, Press Trust of (16 July 2016). "Will file fresh application in National Herald case: Subramanian Swamy to court. On 16 jan 2016 case was dismiss my court as not to get any solid evidence against sonia gandhi and rahul gandhi". Business Standard India. Business Standard.
  49. "National Herald case: Gandhis to appear before court on Dec 19, Rahul says it's 'vendetta' politics". The Indian Express. 9 December 2015.
  50. "National Herald Case: Sonia and Rahul to appear in court on Dec 19". Deccan Herald. 8 December 2015.
  51. "National Herald case: Bail in 5 minutes for Sonia Gandhi and Rahul, next hearing on February 20". India Today. 19 December 2015.
  52. "Sonia Gandhi, Rahul get bail in National Herald case". The Times of India. 19 December 2015.
  53. "National Herald case: Delhi HC reserves order on Congress' plea". Zee News. 18 April 2016.
  54. "Why is Congress so afraid of National Herald papers? Will re-apply for documents: Subramanian Swamy". Zee News. 17 July 2016.
  55. "National Herald case: HC sets aside trial court order summoning Cong documents". Hindustan Times. 12 July 2016.
  56. "Subramanian Swamy's application in National Herald case dismissed by Delhi court". The Indian Express. 26 May 2018. Retrieved 21 January 2019.
  57. Rautray, Samanwaya (5 December 2018). "National Herald case: Supreme Court lets I-T department reopen Rahul and Sonia Gandhi's tax filings". The Economic Times. Retrieved 21 January 2019.
  58. Nandini, Navashree (29 May 2019). "Big Blow to Gandhis: ED permanently attaches properties worth Rs 64 crore in National Herald Case". RepublicWorld. Retrieved 2 June 2020.
  59. Salunke, Pratik (9 May 2020). "National Herald case: ED attaches part of Bandra building worth Rs 16 crore". The Hindustan Times. Retrieved 5 June 2020.
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