Delhi HC clears I-T probe against Sonia, Rahul in National Herald case

12 May 2017


In a development bound to trouble the Gandhi family and the Congress party, the Delhi High Court today cleared a lower court order for an income tax probe into Young Indian Private Ltd, which owns the now-defunct National Herald newspaper and its properties.

The Young Indian Private Limited has Congress chief Sonia Gandhi and party vice-president Rahul Gandhi as directors.

Earlier, in an application filed by Bhartiya Janata Party leader Subramanian Swamy, the Patiala House Court had given its nod to investigate the matter, which the Gandhis challenged in the Delhi High Court.

Subramanian Swamy had filed an application in 2012, accusing Congress chief Sonia Gandhi and her son Rahul and others of conspiring to cheat in the transfer of property belonging to the erstwhile National Herald, a newspaper founded by late Prime Minister Jawaharlal Nehru and owned by Allied Journals Pvt Ltd (AJL).

Swamy had alleged that the Congress granted an interest-free loan of Rs90.25 crore to Allied Journals Pvt Ltd, owner of the National Herald newspaper, which was not repaid - a violation of Section 269T of the Income Tax Act, 1961.

The Gandhis moved the Delhi High Court and in August 2014, the high court stayed proceedings in the case while the Enforcement Directorate began preliminary examinations.

But, a year later, the ED decided to close the case due to lack of substantive evidence but days later ED director Rajan Katoch has been removed.

The high court, however, refused to quash lower court's summons to Sonia and Rahul Gandhi. Subsequently, on 9 December 2015, Sonia, Rahul, Motilal Vora, Oscar Fernandes and Suman Dubey appeared before a metropolitan magistrate in Patiala House Courts complex and got bail.

On 12 February 2016, the Supreme Court granted exemption to all the five accused in the case from personal appearances while refusing to quash proceedings against them.

Simultaneously, the Delhi High Court set aside the trial court judgment allowing examination of balance sheets and other documents of the Congress party and other two companies, the AJL and Young Indian.

However, the high court today cleared way for the Income Tax Department to investigate the mother-son duo in connection with the alleged misappropriation of funds in the National Herald case.

Sonia and Rahul have been accused of conspiring to "cheat and misappropriate funds" by paying Rs50 lakh through which Young Indian Pvt. Ltd obtained the right to recover Rs90.25 crore which Associate Journals Ltd (AJL) owed to the Congress.

Speaking to CNN-News18, BJP leader and Rajya Sabha member Subramanian Swamy said that these cases will see the light of day.

Reacting to the development, Congress spokesperson Randeep Singh Surjewala, said, "The Gandhis have the option of approaching the Supreme Court. The I-T (department) cannot open a one-sided investigation. Swamy is not in-chare of I-T."

As per documents, Sonia and Rahul have individual shareholdings of 38 per cent each in the company while Vora and Fernandes hold the remaining 24 per cent in equal parts.

Swamy alleges that YIL had taken over the assets of the defunct AJL in a "malicious" manner to gain profit and assets worth over Rs2,000 crore. Swamy alleged that YIL had paid just Rs50 lakh to obtain the right to recover Rs90.25 crore that AJL had owed to the Congress party, given earlier as a loan to start the newspaper.

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