National Herald case hits Modi govt at wrong time

National Herald case hits Modi govt at wrong time

National Herald case hits Modi govt at wrong time

The National Herald case could not have come at a worse time for the Narendra Modi government. At a time when the party in power was making efforts to create an atmosphere of bonhomie with main opposition party Congress for smooth legislative business, the Delhi High Court’s order came as virtual spoilsport.

Apparently rattled by dismissal of their plea against summons, Congress president Sonia Gandhi and vice-president Rahul Gandhi called it political vendetta and showed no sign of cooperation in Parliament.

Upbeat with the order, BJP leader Subramanian Swamy vowed to oppose their bail if they appear before the Delhi court on December 19 in response to summons on charge of misappropriation of property, criminal breach of trust, cheating and criminal conspiracy in converting the properties of Associated Journals Private Ltd (AJL) to their exclusive control.

It is a matter of record that the AJL controlled by the Congress through its president, vice-president, treasurer and other office-bearers closed down publication of the ‘National Herald’ ‘Navjivan’ and ‘Qaumi Awaz’ in 2008. The AJL owed Rs 90 crore to Congress.

Subsequently, on November 23, 2010, Young Indian Private Limited Company was incorporated with just Rs 5 lakhs as paid up capital under Section 25 (not for profit) of the Companies Act, in which Sonia and her son Rahul  owned 38 per cent each of the shares.

The Young India’s Board of Directors had in December 2010, formally passed a resolution to “own” the outstanding debt of the AJL, and obtained an unsecured zero interest loan from the Congress for an equivalent amount to liquidate the said debt.

Later, the Young India, by payment of Rs 50 lakh, acquired complete ownership of AJL and AJL’s assets of over Rs 2,000 crore spread across various parts of the country, including New Delhi’s Herald House, having monthly rental income of Rs 60 lakh. In its objectives, the Young India had already declared that it will not engage in publishing newspapers.

Swamy claimed that if the assets of AJL had been liquidated, then hundreds of shareholders of AJL would have received back sums equivalent to several thousand times the amount invested by them originally and the Congress would have got back the loan with interest.

But, he said, instead of adopting such a transparent course, the party leaders, by dubious means, misappropriated the entire assets of AJL by gaining effective control over it. Thus, the original shareholders of AJL as well as the supporters and donors of Congress have been cheated.

Now the question is, did these acts, at all amount to various offences. And how Swamy was concerned about the dealings of a political party. The HC answered, saying, “In a democratic set up, how a political party of national stature acts is everybody’s concern. Rather, it is a matter of serious concern as allegations of fraud etc are levelled against the Congress, who(which) has ruled the Nation for many decades.”

Swamy’s locus standi

The issue relating to Swamy’s locus standi was dealt notably by even the trial court while issuing summons against the leaders on June 26, 2014. It had relied upon the SC's verdict in the A R Antulay Vs Ramdas Srinivas Nayak (1984) which held anyone can put the criminal law into motion except where the statute enacting or creating an offence indicates to the contrary.

The HC also repelled locus standi argument, relying upon Subramanian Swamy Vs Manmohan Singh (2012) judgment of the Supreme Court, which asserted that freedom of a private citizen to proceed against the corrupt cannot be restricted.

The leaders, on their part, maintained that the ingredients of the criminal offences alleged against them are found lacking. They also claimed properties of the AJL could not be sold due to various covenants.

Among others, they asserted the entire complaint is malafide and has been filed only to wreak vengeance on the accused persons due to the personal and political grudges. However, the HC said, “Such grave allegations cannot be brushed aside lightly...To say the least, to do so would be preposterous.”

Now, the option before the Congress leaders is to agitate afresh before the Supreme Court that the party was well within its right to give loan to AJL and it was equally within its right to write off the loan or assign the loan to Young India and that there was no breach or illegality in the facts of the case.

There was neither any misappropriation of funds nor wrongful loss to the shareholders of the AJL. There is also no dishonest use or disposal of any property in violation of any law. Since the YI is a Section 25 company, it cannot distribute its profit to its shareholders, that is the Gandhis. And that the allotment of shares was not done behind the shareholders back but with their express approval and consent.

But if the Gandhis decide to appear before the trial court on December 19, they could turn the tables on the ruling dispensation, by gaining sympathy from the general public. Though the complaint was filed by Swamy in his personal capacity, the government would find it hard to dispel vendetta charge in the days to come.

And if they approach the Supreme Court and, if at all, it dismissed their appeal, it would have deprived them of an opportunity to approach higher courts for a long time to come. Not only this order would have validated the magistrate’s summons, it could have also weighed heavily in the magisterial court that the apex court has found merit in the case. This might have curtailed various legal remedies and arguments that the Congress leaders still have before the magistrate. 

DH Newsletter Privacy Policy Get top news in your inbox daily
GET IT
Comments (+)