The Rouse Avenue Court is set to pronounce its order today, on whether to take cognisance of the Enforcement Directorate’s prosecution complaint in the high-profile National Herald money laundering case.
The case names Congress leaders Sonia Gandhi, Rahul Gandhi, Suman Dubey, Sam Pitroda, Young Indian, Dotex Merchandise Pvt. Ltd., and Sunil Bhandari as accused under the Prevention of Money Laundering Act (PMLA).
Allegations & ED’s Charge Sheet
The case centers on the alleged misappropriation of funds through Young Indian, a company which acquired the right to recover a loan of ₹90 crore owed by Associated Journals Ltd. (AJL) after paying just ₹50 lakh to the Congress party. The Congress had originally loaned ₹90 crore to AJL, the publisher of the now-defunct National Herald newspaper.
The ED contends that this transaction was structured to facilitate money laundering. “Young Indian was doing money laundering, still doing,” argued Additional Solicitor General (ASG) S.V. Raju during rebuttal arguments on July 12. He added, “Young Indian gave ₹50 lakh out of ₹1 crore loan from Dotex.”
ASG Raju: “Total Fraud,” “Cheating Donors”
Raju alleged that donors to the All India Congress Committee (AICC) were misled. “Neither of the donors was aware of Young Indian nor its objectives,” he said, asserting that some donations were made under the instruction of senior Congress leaders. He claimed that Young Indian, formed in November 2010, did not carry out activities aligned with its stated objectives and instead became the owner of assets worth ₹1,910 crore without direct investment in AJL.
“Why would a charitable institution invest ₹50 lakh to recover ₹90 crore if the amount was not even recoverable?” questioned Raju. He also emphasized that the right to recover a debt is considered property under law, stating, “They have the right to recover ₹90 crores by paying mere ₹50 lakh.”
Role Of Accused & Company Liability
Raju submitted that Sonia Gandhi, Rahul Gandhi, Dubey, and Pitroda were all directors of Young Indian and in charge of its operations. “When an offence is committed by a company, every person responsible for its conduct becomes liable under Section 70 of the PMLA,” he said.
He further argued that Rahul Gandhi became a director before Young Indian made the ₹50 lakh payment to AICC, tying him directly to the transaction. Sonia Gandhi was also serving as a director when the alleged contraventions took place.
Dotex Merchandise Pvt. Ltd., which provided the ₹1 crore loan to Young Indian, was described by the ASG as “merely an entry provider.” He alleged that someone gave cash, and Dotex in turn issued a cheque. The loan was unsecured, carried a 14% interest rate, but no interest was recorded in the books.
Defense Counters Money Laundering Allegations
The defense argued that no case of money laundering exists. They emphasized that the ₹90 crore loan to AJL was intended for the revival of the National Herald, not for acquisition or profit. AJL, they noted, has historical significance as it was founded by national leaders like Jawaharlal Nehru and Rafi Ahmed Kidwai.
They also rejected the claim of donor fraud, arguing that there was no specific use stipulated for the donations received by AICC.
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