National Herald case

Delhi High Court has refused to cancel the summons issued by the Trial Court to Sonia Gandhi, Rahul Gandhi and others to appear before the Trial Court. The petition in the trial court filed by Subramanian Swamy alleges that the Gandhis have unlawfully enriched themselves by acquiring Associated Journals Ltd. by dubious means. Evidence seems to support Swamy's contention. Therefore Justice Sunil Gaur of the Delhi High Court rejected the petition of Gandhis.

Text of the order is available here:

http://lobis.nic.in/ddir/dhc/SUG/judgement/07-12-2015/SUG07122015CRLMM33322014.pdf

It is a pity that the Gandhis have such a stranglehold over Congress that the party members respect them more than the party. Some extracts from the order:

"It has to be kept in mind that AJL was a Public Limited Company, which had immovable assets having

value of crores of rupees. It is matter of record that Congress Party had

assigned the huge debt of `90 crores to a Section 25 Company i.e. Young Indian on receiving a paltry amount of `50 lacs only. For this, the Congress Party owes an explanation to its supporters, donors, etc.."

"Considering the fact that AJL has sizeable assets of `2000 crores, it

needs to be explained by petitioners as to what was the need to assign the

huge debt of `90 crores when this debt could have been easily liquidated

by AJL from its sizeable assets. Even writing off such a huge debt by the

Congress Party can legitimately attract allegations of cheating, fraud, etc..

Petitioners had gone step further in conspiring to get this huge debt

assigned to a Special Purpose Vehicle i.e. Y.I. and thereafter, to hijack

AJL via Y.I.. Such grave allegations levelled against petitioners cannot

be brushed aside lightly by relying upon judicial precedents cited, to

conclude that the ingredients of the criminal offences alleged are lacking.

To say the least, to do so would be preposterous. Such a prima facie view

is being taken in view of the fact that the assignment of the huge debt by

Congress Party to Y.I. was for a paltry sum of `50 lacs. This is certainly

questionable and justifiably attracts the allegations of cheating,

misappropriation, criminal breach of trust, etc.. Such a view is being

taken as it needs to be explained before the trial court as to how the net

worth of AJL can be negative when it has assets worth crores of rupees. It

also crops up in the mind of a prudent person as to why interest free loan

was assigned and why it was not written off. In any case, writing off

such a huge debt by a legendry Political Party is indeed questionable.

Instead of adopting such a questionable course, what was done by the

Congress Party is more questionable. It also needs to be answered as to

why the genuine shareholders were marginalized in the Extraordinary

General Meeting, which was attended by just seven shareholders. Such a

questionable conduct of petitioners certainly invites allegations of

committing the offences for which petitioners have been summoned. Is it

not criminal misappropriation of Congress Party’s funds? This aspect

needs to be addressed after respondent-complainant is cross-examined at

the pre-charge stage. It also needs to be examined at pre-charge stage as

to whether lacs of citizens who had donated to the Congress Party felt

cheated by assignment of such a huge debt to Y.I. who was managed by

none others than petitioners, who were Office Bearers of Congress Party

as well as Directors of Y.I.. Not only this, the main persons, who were

instrumental in allegedly siphoning off political funds were the recipients

of the assignment of the huge debt by the Congress Party and they were

the same persons, who had clandestinely acquired the control of AJL. All

this smacks of criminality. What species of criminal offence is made out

is not required to be seen at this initial stage."

 "Upon reading the complaint as a whole,

it emerges that the transactions of the Congress Party with AJL via Y.I.

are not a mere commercial transactions as these transactions legitimately

attract the allegations of cheating, fraud, breach of trust,

misappropriation, etc. "

"This Court is of the considered view that the gravity of the

allegations levelled against petitioners has a fraudulent flavour involving

a national Political Party and so, serious imputations smacking of

criminality levelled against petitioners need to be properly looked into.

39. After having considered the entire case in its proper perspective,

this Court finds no hesitation to put it on record that the modus operandi

adopted by petitioners in taking control of AJL via Special Purpose

Vehicle i.e. Y.I., particularly, when the main persons in Congress Party,

AJL and Y.I. are the same, evidences a criminal intent. Whether it is

cheating, criminal misappropriation or criminal breach of trust is not

required to be spelt out at this nascent stage. In any case, by no stretch of

imagination, it can be said that no case for summoning petitioners as

accused in the complaint in question is made out. Questionable conduct

of petitioners needs to be properly examined at the charge stage to find

out the truth and so, these criminal proceedings cannot be thwarted at this

initial stage. Such a view is being formed on a bird’s eye view of the

whole case and the observations in the impugned order of there being a

prima facie case have to be read in the context of there being sufficient

grounds for summoning petitioners."