In a major setback to Congress high command Sonia Gandhi and Rahul Gandhi, Delhi High Court today dismissed their petition in National Herald case. They will have to appear in lower court.
Delhi HC verdict – Background
Reserving its verdict in the pleas against summoning Sonia and Rahul Gandhi, the Delhi High Court on Friday felt that the Congress party could have written off the loan of Rs 90.25 crore owed to it by the publishers of National Herald, instead of assigning it to a charitable company in which some of its leaders are directors.
Justice Sunil Gaur made the observation while reserving judgement on the pleas of Congress President and the Vice President and four others against a trial court order summoning them on a cheating and breach of trust complaint filed by BJP leader Subramanian Swamy.
In response, Senior advocate Kapil Sibal, appearing for the Gandhis, said the loan was assigned to “clean the balance sheets of AJL” and to revive the company so that it can borrow money from the banks and run on its own.
The party had loaned Rs 90.25 crore to Associated Journals Ltd.(AJL), publisher of National Herald, and on December 28, 2010 it had assigned this debt to Young Indian Ltd (YIL), the charitable company, for Rs 50 lakh, which, according to Swamy, amounted to breach of trust and cheating.
On his complaint, the trial court had issued summons to Sonia, her son Rahul and five others-Congress treasurer Moti Lal Vora, General Secretary Oscar Fernandes, Suman Dubey, Sam Pitroda and YIL.
Arguments presented by Subramanian Swamy:
Swamy, while concluding his arguments yesterday, told the court that the loan was “illegally” given to AJL and its shareholding was “fraudulently obtained” by YIL in order to misappropriate the property of the publication.
He argued that the magistrate “applied her mind” while issuing the summons and added that they could have been challenged in the trial court itself instead of coming to the high court and sought that the matter be sent back.
Swamy also contended that the political party was being provided bungalows for office space, free time on government run television and radio, security cover, and exemption from income tax and thus, its “expenditure and investment obviously has to be for furthering public interest and cannot be for furthering private interest of anyone including its office bearers”.
Swamy also said that the assignment of the loan “was on the false basis that the said debt owed by AJL to Congress was irretrievable despite the fact that the AJL owned over Rs 2000 crore worth of immovable properties”.
He further contended that the Congress leaders were also the main Directors of YIL and “knew that there was no direct route to acquire control over AJL and its assets without being saddled with the liability of Rs 90 crores and hence, they conspired to acquire AJL by the indirect route”.
Kapil Sibal refuting Swamy’s allegations:
Denying Swamy’s allegations, Sibal said there were no ingredients of cheating or breach of trust as these are offences committed against an individual and not against a person in general and since the BJP leader was not a victim he did not have the locus to file a complaint.
He said the giving of loans to AJL by the Congress was an action which was in consonance with the objectives of the party and in line with objectives of AJL.
Sibal refuted Swamy’s contention that there was a change in control of AJL as after assigning of the loan to YIL, the charitable company was given 99.1 per cent of the shares of the publishing house.
He said that the promoters and shareholders’ shareholding remained the same before and after the shares were issued.
Sibal and senior advocate Abhishek Manu Singhvi, appearing for the Congress leaders, also told the court that political parties can invest in news publications.
The trial court had on June 26 last year summoned Sonia, Rahul, Vora, Fernandes, Dubey and Pitroda to appear before it on August 7, 2014 on Swamy’s complaint. The Congress leaders had, thereafter, on July 30, 2014, moved the high court which had stayed the summons on August 6 last year.
Thereafter, on December 15, 2014, the court had stayed the summons till final disposal of the petitions.
With inputs from PTI
According to latest updates, Subramaniun Swamy will move to Supreme Court to file Caveat in National Herald case so that Sonia Gandhi and Rahul Gandhi don’t get a stay in the case.High Court has also declined to grant Rahul and Sonia Gandhi exemption from personal appearance before trial court in the matter.