On Tuesday, a Delhi court declined to take cognizance of the Enforcement Directorate’s money laundering complaint against Congress leaders Rahul Gandhi and Sonia Gandhi in the National Herald matter, holding that the case was legally unsustainable at its very inception. The court’s intervention carries immediate significance, reiterating a core requirement under the Prevention of Money Laundering Act (PMLA), money laundering proceedings cannot be triggered unless they are founded on an FIR relating to a scheduled offence.
The case arose from the ED’s allegations surrounding the transfer of debt and assets of Associated Journals Limited, the company that published the now-defunct National Herald. According to the agency, a private company, Young Indian Pvt Ltd, acquired AJL’s liabilities for a nominal sum and subsequently gained control over properties valued in the thousands of crores, allegedly benefiting the Gandhis, who held a controlling stake in YIL. The ED claimed this transaction amounted to a laundering of the proceeds of crime. However, instead of relying on an FIR for a scheduled offence, the ED’s prosecution was premised on a court’s earlier cognisance and summoning order passed on a private complaint filed under the CrPC, a procedural route that became central to the challenge before the trial court.
Special Judge Vishal Gogne of the Rouse Avenue Courts held that the ED’s complaint failed to meet the statutory threshold required under the PMLA. The court emphasised that money laundering is a derivative offence and must necessarily be linked to a scheduled offence registered through an FIR. It categorically ruled that “cognizance of the present complaint is impermissible in law” when the prosecution is founded on a private complaint rather than an FIR. The Court further observed that since the Delhi Police’s Economic Offences Wing has already registered an FIR in the matter, it would be inappropriate to assess the ED’s allegations on their merits at this stage. On this reasoning, the court refused to entertain the ED’s prosecution complaint.
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