Delhi HC questions assigning Rs90.25-cr National Herald loan to Sonia-Rahul firm, reserves order

Justice Sunil Gaur of the Delhi High Court hearing the National Herald case on Friday said the Congress party could have written off its Rs90.25 crore loan to publishers of National Herald instead of assigning it to a charity outfit run by some of its leaders.

The high court, however, reserved its order on the issue of the legality of a loan given by Congress-owned Associated Journal Ltd (AJL), publisher of the erstwhile National Herald, to Young Indian Pvt Ltd (YIL), a company majority owned by Sonia Gandhi and her son Rahul Gandhi.

The court made the observation while reserving judgement on the pleas of Congress president and 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.

Swamy claimed that Sonia and Rahul Gandhi benefited from the acquisition of AJL as the company had received an interest-free loan of Rs90.25 crore from the Congress and the party had transferred the debt to YIL for Rs50 lakh.

The party had loaned Rs90.25 crore to AJL, publisher of National Herald, and on 28 December 2010 it had assigned this debt to YIL, the charitable company, for Rs50 lakh, which, according to Swamy, amounted to breach of trust and cheating.

Concluding his arguments in the case, Swamy 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.

Senior advocate Kapil Sibal, appearing for Sonia Gandhi, sought quashing of the proceedings initiated by the lower court against her and others, saying the complaint made by Swamy against them were only "allegations without any supporting proof".

He said there was no illegality of Young India Ltd. (YIL) taking over Associated Journals Ltd (AJL), as per the Companies Act.

Hearing in the matter ended with the arguments of main petitioner and BJP leader Subramanian Swamy who made forceful plea for dismissing the congress leaders demand to stay the trial court order. This was contested by Congress' lawyers led by Kapil Sibal and Abhishek Singhvi.

The two-hour-long arguments in the thickly packed court room witnessed frequent sparring between Swamy and Sibal and intervention by Justice Sunil Gaur.

The 16-month-long arguments in the case saw three judges one after the other hearing the matter.