National Herald Case: Court Ruling Brings a Long-Running Political Storm to a Halt

A special Delhi court on Tuesday dismissed the Enforcement Directorate’s prosecution complaint in the National Herald case, holding that the agency had failed to meet the foundational requirement under the Prevention of Money Laundering Act. The court ruled that in the absence of a registered scheduled or predicate offence, a money laundering probe against Sonia Gandhi, Rahul Gandhi, and others could not proceed, effectively halting the ED’s case. The ruling capped a legal and political controversy that has spanned over a decade. The case traces its origins to 2008, when Associated Journals Limited, the publisher of the National Herald newspaper, ceased operations but retained valuable real estate assets across major Indian cities. To address AJL’s financial liabilities, the Congress party reportedly extended interest-free loans amounting to around Rs 90 crore. In 2010, Young Indian Private Limited was incorporated and soon acquired 100 percent of AJL’s shareholding by assuming the outstanding loan for a consideration of Rs 50 lakh. The transaction drew scrutiny because AJL owned properties estimated to be worth more than Rs 750 crore. Sonia Gandhi and Rahul Gandhi held 38 percent each in Young Indian, with the remaining shares held by Motilal Vora and Oscar Fernandes.
In 2011, BJP leader Subramanian Swamy filed a private complaint in a Delhi court, alleging criminal misappropriation, cheating, and breach of trust in the transfer of AJL to Young Indian. The Delhi High Court issued notices to Sonia and Rahul Gandhi in 2012, initiating formal judicial proceedings.
The Income Tax Department examined the deal in 2014 and questioned the charitable nature of Young Indian, observing that its shareholders had benefited from the arrangement. In 2015, the trial court summoned Sonia Gandhi, Rahul Gandhi, and several others. They appeared before the court in 2016 and 2017 and were granted bail.
In 2014, a significant internal development occurred within the Enforcement Directorate when Himanshu Lal, then a Joint Director, recorded that a money laundering investigation could not be initiated in the absence of a registered predicate offence and asked the CBI to register an FIR in the matter. However, this crucial technical point went largely unaddressed. Even today, on the same basis, the Delhi court declined to take cognisance of the Enforcement Directorate’s chargesheet.
Despite this, the ED registered a case under the Prevention of Money Laundering Act in 2018, relying on the Income Tax findings and Swamy’s complaint. The agency questioned several individuals over the following years, including former Union Minister Pawan Bansal. In 2022, Rahul Gandhi was questioned for several days, followed by multiple rounds of questioning of Sonia Gandhi.
In 2023, the ED provisionally attached AJL properties worth over Rs 750 crore and carried out searches in Delhi and Mumbai. A fresh complaint was filed in early 2024 naming senior Congress leaders as accused. Cut to 2025, a special Delhi court dismissed the ED’s prosecution complaint, ruling that the mandatory requirement of establishing a scheduled offence under PMLA had not been fulfilled, bringing the money laundering proceedings in the National Herald case to a halt and a certain Mr. Himanshu Lal being completely vindicated.

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