National Herald case: ED 'simply inverted template' of PMLA, says Delhi court

New Delhi, Dec 16 The Enforcement Directorate “simply inverted the template" of PMLA by registering an FIR in 2021, a Delhi court on Tuesday said while refusing to take cognisance of the ED's money laundering charge against Congress leaders Sonia Gandhi and Rahul Gandhi in the National Herald case.

In his 117-page order, Special Judge Vishal Gogne said that the CBI had decided not to register an FIR on Subramanian Swamy’s 2014 private complaint, and there appeared to be a “long-lasting consensus” between it and the ED till an Enforcement Case Information Report (equivalent to FIR) was registered on June 30, 2021.

The judge said that before the ECIR was registered, the ED was probably “cognisant of the necessity of an FIR by a law enforcement agency” like the CBI as the “jurisdictional foundation” for the investigation under the Prevention of Money Laundering Act (PMLA).

He said, “Upon first having shared information with the CBI in the year 2014 and then having waited for seven years for the CBI to act, the ED simply inverted the template of money laundering being consequential to the predicate offence by recording its own ECIR on June 30, 2021.”

“The PMLA perceives the scheduled offence to be recorded and commenced for investigation as the first step, and the probe into money laundering as the second step. Perhaps, the ED should have stayed as staid as the CBI,” the court said.

The original criminal act from which the criminal proceeds are generated is called a predicate offence, while the activity of disguising the criminal origins of the proceeds of crime is called money laundering.

The judge said that the conventional approach of both agencies in not registering an FIR was reiterated by a 2022 Supreme Court verdict, holding that an FIR in the scheduled offence was a prerequisite for investigation into the proceeds of crime.

He said that an FIR was not a mere entry in a register but “the progenitor of material steps in investigation” and as such a “league” was “unattainable” by an investigation based on a complaint.

“Certainly, the ED, as an investigation agency dealing with the proceeds of crime, cannot be training or involving individual complainants like Swamy, akin to ‘Nodal Officers’ or Law Enforcement Agencies (LEAs) in terms of the Financial Action Task Force (FATF) report,” the judge said.

He said there were several “improbabilities” because of which the ED apparently was “possibly loath to register an ECIR on the complaint of Swamy since 2014”.

“The relevant notings from the case diaries of the present investigation, inspected by the court, are a testament to the acceptance, by the ED, of the non-viability of the individual complaint (by Swamy) as the basis for initiating a PMLA investigation,” the judge said.

He said the consistency of a long held view regarding the requirement of an FIR in the predicate offence as a trigger for PMLA investigation was ruptured by the ED in instituting the present prosecution complaint (ED's equivalent of chargesheet) without an FIR.

Judge Gogne said that a private complaint could not “liaison with the premier agency tasked with tackling money laundering for apparent reasons of locus, capacity, confidentiality and coordination”.

He said, “For want of a better expression, the court would observe that a complaint case and the incidents of an FIR are chalk and cheese in their contribution to evidence collection and meaningful trial. The complex and layered allegation set of economic offences or financial frauds is certainly not amenable to trial as a complaint case.”

Regarding the merits of the allegations, the judge said he was not required to address them.

“The ED is evidently conducting further investigation on the allegations, as evident from its sharing information under section 66(2) PMLA with the Economic Offences Wing (EOW), Delhi which has resulted in registration of an FIR by the EOW on October 3, 2025,” the special judge said.

He said that the continuing investigation by these two agencies "may lead to the uncovering of additional evidence or (additional) accused”.

“Since the present order has declined cognisance solely on a question of law related to jurisdiction of the ED and therefore also the jurisdiction of this court, the present order does not efface either the existing allegations or curtail further investigation,” the judge said.

New Delhi, Dec 16 In a relief to Congress leaders Sonia Gandhi, Rahul Gandhi and five others, a Delhi court on Tuesday refused to take cognisance of the Enforcement Directorate's money laundering charge against them in the National Herald case, holding that the agency's probe stemmed from a private complaint and not an FIR.

Delivering his order in a case that was marked by political slugfest and legal battles for several years, Special Judge Vishal Gogne said the cognisance of the ED's prosecution complaint relating to the offence of money laundering was "impermissible in law.”

The ED complaint was based on an investigation into a complaint by private person Subramanian Swamy and not on an FIR of a predicate offence, the judge said.

The court said it has now become premature and imprudent for it to decide the submissions made by the ED as well as the proposed accused in relation to the merits of the allegations, especially so when cognisance is liable to be declined on a “pure question of law”.

“Other arguments possibly live to fight another day."

ED officials said the probe agency may file an appeal against the court's order after taking opinion from law officers, including Solicitor General Tushar Mehta.

With court proceedings not moving to the trial stage for now, the officials said the agency will file a fresh chargesheet against Sonia and Rahul Gandhi apart from others as it has taken cognisance of the latest Delhi Police FIR filed in the National Herald money laundering case on October 3 this year.

The ED has accused Congress leaders Sonia and Rahul Gandhi, as well as late party leaders Motilal Vora and Oscar Fernandes, along with Suman Dubey, Sam Pitroda, and a private company, Young Indian, of conspiracy and money laundering.

It has been alleged that they acquired properties worth approximately Rs 2,000 crore belonging to Associated Journals Limited (AJL), which publishes the National Herald newspaper.

Reacting to the order, the Congress claimed that the "illegality" of the Narendra Modi government and its "politically motivated prosecution stands fully exposed".

In a statement, the Congress said the ED's proceedings against Congress leadership -- Sonia Gandhi and Rahul Gandhi -- in the case have been found to be "completely illegal and mala fide" by the court.

"Truth has prevailed, and truth will always prevail," Congress spokesperson Pawan Khera and Mohammed Khan told a joint press conference.

The BJP said no cognizance is not a clean chit to Sonia and Rahul Gandhi.

In a post on X, BJP national spokesperson Gaurav Bhatia said the primary criminal case, which originated from the private complaint filed by Subramanian Swamy alleging cheating, criminal conspiracy, and breach of trust, the predicate offense, is still pending trial in the Delhi Court.

"Bail Granted, Not Acquitted: Sonia and Rahul Gandhi were summoned in that original case and are out on bail. The court has not acquitted them in this case."

In a related development, the court set aside a magisterial court's order directing the Delhi Police to provide a copy of an FIR registered by them against Sonia and Rahul Gandhi in the National Herald case.

Reading out the operative part from the 117-page order on cognisance of the ED's complaint, judge Gogne said the Delhi Police's Economic Offences Wing has already lodged an FIR in the case, and hence, it will be premature to adjudicate on ED's arguments in the case based on merits.

"An investigation and the consequent prosecution complaint pertaining to the offence of money laundering defined under Section 3 of the PMLA and punishable under Section 4 is not maintainable in the absence of an FIR or offence mentioned in the schedule to the Act."

While section 3 of the Prevention of Money Laundering Act (PMLA) deals with the offence of money laundering, section 4 pertains to punishment for the offence of money laundering.

"Cognisance of the offence under section 3 and punishable under section 4 is declined. The complaint is dismissed," the court said.

A statement released by the Congress asserted that the party and its leadership were committed to fighting for the truth and for the rights of every Indian. "We cannot, and will not ever be intimidated, because we fight for the truth."

Karnataka Chief Minister Siddaramaiah said the court order has completely exposed the "illegality" and "malafide intent" of the Modi government at the Centre.

Deputy CM D K Shivakumar said the Modi government's alleged misuse of power and malafide intent have now been exposed before the nation. "Truth and justice prevail."

The ED has further alleged that the Gandhis held the majority 76 per cent shares in Young Indian, which "fraudulently" usurped the assets of AJL in exchange for a Rs 90 crore loan.

The court also heard a separate plea filed by the Delhi Police which challenged the magisterial court's order arguing that Rahul Gandhi, Sonia Gandhi and others mentioned in the case are not entitled to a copy of the FIR.

The judge, however, said the accused may be informed that the FIR has been registered.

On October 3, Delhi Police filed an FIR against Sonia and Rahul Gandhi and other accused in the National Herald case on a complaint by the ED as part of the federal probe agency's money laundering probe into charges that the Gandhis allegedly "abused" their position for personal gains.

The police has mentioned criminal conspiracy, dishonest misappropriation of property, criminal breach of trust and cheating charges in the FIR that names the Gandhis, Congress leaders Suman Dubey and Sam Pitroda, entities like the Young Indian and Dotex Merchandise Ltd, Dotex promoter Sunil Bhandari, AJL, and unknown others.

These entities, except unknown others, are also named as accused in the ED chargesheet filed before a Delhi court in April.

The ED used powers available to it under Section 66(2) of the PMLA to get the police FIR registered.

This section allows the federal agency to share evidence for registration of a criminal predicate offence by a law enforcement agency so that it can subsequently book a money laundering case to take forward the investigation.