Delhi High Court to examine ED’s challenge to the trial court’s refusal to take cognisance of the money-laundering prosecution against Sonia Gandhi, Rahul Gandhi and others
Munish Kumar Gaur
Advocate | Former Civil Servant
The National Herald case has once again come into sharp focus, with the Delhi High Court scheduled to hear the Enforcement Directorate’s (ED) challenge on 2 November 2026 against the trial court’s order refusing to take cognisance of its money-laundering prosecution complaint against Congress leaders Sonia Gandhi, Rahul Gandhi and others. The proceedings assume considerable legal significance, not merely because of the prominent political personalities involved, but also because they raise important questions concerning the interpretation, scope and application of the Prevention of Money Laundering Act, 2002 (PMLA).
The controversy traces its origin to a private criminal complaint filed in 2012 by Dr Subramanian Swamy before a Metropolitan Magistrate under Section 200 of the Code of Criminal Procedure. The complaint alleged financial irregularities and fraudulent acquisition of Associated Journals Limited (AJL), the company that published the National Herald newspaper. The central allegation concerns the acquisition of control over AJL through Young Indian Private Limited, in which Sonia Gandhi and Rahul Gandhi allegedly held 76 per cent of the shareholding. The transaction reportedly involved an outstanding loan of approximately ₹90 crore and, according to the Enforcement Directorate, resulted in control over AJL’s properties and assets estimated to be worth approximately ₹2,000 crore. These allegations have been contested by the respondents and remain subject to judicial determination.
Following the proceedings arising from the private complaint, the Enforcement Directorate initiated its investigation under the PMLA and subsequently filed a prosecution complaint. However, on 16 December 2025, Special Judge Vishal Gogne of the Rouse Avenue Court, Delhi, declined to take cognisance of the ED’s complaint. The trial court’s principal reasoning was that the prosecution could not proceed in the circumstances presented because the alleged scheduled offence forming the basis of the ED’s investigation had originated from a private complaint rather than an FIR registered by a law-enforcement agency. The Court considered the absence of such an FIR a legal impediment to taking cognisance of the ED’s prosecution complaint.
It is important to appreciate the precise scope of this order. The trial court did not adjudicate the underlying allegations of fraud, financial irregularities or money laundering on their merits, nor did it pronounce the accused innocent after a full-fledged trial. Its decision was confined to the threshold question of the legal maintainability of the ED’s prosecution complaint. This distinction is essential to understanding the present stage of the litigation.
Challenging the trial court’s decision, the Enforcement Directorate approached the Delhi High Court, contending that the order rests on an unduly restrictive interpretation of the PMLA and substantially undermines the statutory framework intended to combat money laundering. The agency’s principal argument is that the law does not necessarily distinguish between a scheduled offence originating from a police FIR and one brought before a competent Magistrate through a private criminal complaint, provided the Magistrate has taken cognisance of the offence and judicial proceedings have commenced. According to the ED, judicial cognisance of a scheduled offence should not be rendered legally inferior merely because the proceedings originated from a private complaint rather than an FIR. The agency maintains that such an interpretation could create an artificial limitation on the enforcement of the PMLA.
Sonia Gandhi and Rahul Gandhi have strongly contested the ED’s challenge. In their written responses, reportedly filed on 18 September 2026, they have described the revision petition as an abuse of the process of law and maintained that the trial court’s order is legally sound. Their defence is that the ED has failed to establish any jurisdictional error, perversity or illegality warranting interference by the High Court. They have also questioned the proposition that a private complaint followed by judicial cognisance can automatically provide the statutory foundation necessary for proceedings under the PMLA.
Another significant development occurred on 12 October 2026, when the Delhi High Court declined the ED’s request for an interim status quo order concerning properties attached during its investigation. The agency had expressed apprehension that AJL and related entities might seek the release of attached properties by relying upon the trial court’s order before the PMLA Appellate Tribunal. The properties and equity shares attached by the ED have reportedly been valued at approximately ₹752 crore, including assets associated with Herald House in Delhi. The High Court, however, declined to restrain AJL from pursuing its statutory remedies before the appellate tribunal. It did not itself direct the release of the attached properties, and the substantive challenge to the trial court’s order remains pending.
An additional legal aspect concerns an FIR registered by the Economic Offences Wing of Delhi Police on 3 October 2025. The trial court referred to this development, but the ED clarified that the said FIR was not being relied upon as the predicate offence forming the foundation of its existing prosecution complaint. Consequently, the central controversy remains whether the particular scheduled offence relied upon by the ED had the legally necessary foundation for initiating proceedings under the PMLA.
The hearing scheduled for 2 November 2026 is therefore important from the standpoint of statutory interpretation and criminal jurisprudence. The High Court will have to examine whether registration of an FIR is an indispensable prerequisite for initiating proceedings under the PMLA in circumstances such as those involved in this case, or whether a private criminal complaint, followed by judicial cognisance of the scheduled offence by a competent court, can provide a legally sufficient foundation for the ED’s investigation and prosecution. It will also have to consider whether the trial court correctly interpreted the statutory scheme and whether its order warrants interference in the exercise of the High Court’s revisional jurisdiction.
The significance of this litigation extends beyond the individuals involved and the political controversy surrounding the National Herald newspaper. It concerns the delicate relationship between the criminal justice process, the jurisdiction of competent courts, the investigative powers of enforcement agencies and the statutory safeguards governing prosecution. The PMLA is an important instrument in combating the generation, concealment and laundering of proceeds of crime. Equally, its provisions must be applied strictly in accordance with law, and no investigating agency can claim powers beyond the authority conferred upon it by the statute.
Ultimately, the rule of law requires that allegations of financial wrongdoing be investigated impartially and that accountability be determined through established judicial procedures. Neither political prominence nor political affiliation should influence the application of law. Equally, statutory provisions must not be stretched beyond their legitimate scope. The forthcoming proceedings before the Delhi High Court will provide an important opportunity to examine these competing legal principles.
As of 31 October 2026, the ED’s challenge remains pending, the trial court’s refusal to take cognisance continues to operate, and the substantive allegations of money laundering have not been finally adjudicated in this prosecution. The decision of the High Court, whenever delivered, could have implications extending beyond the National Herald case, particularly in determining the legal relationship between private criminal complaints, judicial cognisance of scheduled offences and the enforcement machinery under the PMLA.
The ultimate test is not the political identity of those involved, but whether the law has been correctly interpreted, consistently applied and impartially enforced.
