The Enforcement Directorate (ED) has escalated its legal battle in the high-profile National Herald case, moving the Delhi High Court to challenge a trial court's decision that dismissed its prosecution complaint against former Congress presidents Sonia Gandhi and Rahul Gandhi. The probe agency has strongly criticised the lower court's order, labelling it as an act of "judicial legislation" that grants a "hall pass" to a category of money launderers.
ED's Core Legal Challenge
In a revision petition filed before the High Court, the ED has contested the December 16 judgment by Special Judge Vishal Gogne. The central agency argues that the judge "erroneously declined" to take cognisance of the alleged money laundering offence against the Gandhis. The trial court's primary reasoning was that the ED's complaint stemmed from a private complaint filed by BJP leader Subramanian Swamy, rather than from a scheduled offence registered by a formal law enforcement agency like the police.
The ED contends that this interpretation is flawed and "impermissible." The agency's petition states that adding words to the definition of a 'scheduled offence' under the Prevention of Money Laundering Act (PMLA) to mean "only registered by a law enforcement agency" amounts to rewriting the statute. The ED asserts that this creates an "artificial distinction" not envisioned by the law, leading to "manifest arbitrariness."
Dispute Over the 'Scheduled Offence'
A pivotal point in the ED's argument is the status of the predicate offence. The agency highlights that the scheduled offences in this case—Section 420 (cheating) and 120B (criminal conspiracy) of the Indian Penal Code—were already taken cognisance of by a competent magistrate based on Swamy's private complaint. This cognisance was subsequently upheld by both the Delhi High Court and the Supreme Court.
The ED argues that a cognisance taken by a court on a private complaint stands on a "much higher footing" than a mere First Information Report (FIR) filed by police. The agency's plea notes, "Hence, the scheduled offence stood on a much higher pedestal than a mere FIR lodged by police." It criticises Judge Gogne for failing to appreciate this legal nuance and for holding that the ED cannot proceed based on a scheduled offence arising from a private complaint.
Allegations of 'Judicial Legislation' and Future Hearing
The ED's petition is scathing in its critique, alleging the trial court order "suffers from the vice of judicial legislation." It claims the judgment attempts to "amend or rewrite" key sections of the PMLA, specifically Section 2(1)(u) and Section 2(1)(y), which define 'proceeds of crime' and 'scheduled offence,' respectively. By creating two classes of scheduled offences—one based on a police FIR and another on a private complaint—the order, according to the ED, allows a person to evade prosecution for money laundering simply because the case originated from a private complaint.
The plea is likely to be heard by the Delhi High Court next week. The legal teams involved are high-profile. The proposed accused persons, Sonia and Rahul Gandhi, were represented in the trial court by senior advocates Abhishek Manu Singhvi and R.S. Cheema, among others. The ED was represented by Additional Solicitor General S.V. Raju.
This move by the ED marks a significant development in the long-running National Herald case, setting the stage for a crucial legal interpretation of the PMLA's provisions regarding the source of a scheduled offence. The High Court's decision will have substantial implications for the agency's investigative powers and the trajectory of this politically sensitive case.
