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Explained: National Herald Case in Which Rahul Gandhi is Out on Bail

This article is a part of a series on alleged corruption cases which we have explained in detail.
Part 1 – National Herald Case
Part 2 – Agusta Westland Case
Part 3 – Aircel-Maxis Case
Part 4 – INX Media Case
Part 5 –  Robert Vadra’s Case
Part 6 – Saradha Chit Fund Case

The Delhi High Court recently dismissed the plea of Congress President Rahul Gandhi and former Congress President Sonia Gandhi that they filed against the Income Tax department in the National Herald case. The Income Tax department wants to re-open their tax assessment for the financial year 2011-12 as part of the ongoing probe in the case. An alleged scam of Rs.5000 crore, let us know more about the National Herald case.

What is a National Herald Case?

In simple words, it is a case of alleged misappropriation of funds and cheating.

National Herald is a newspaper which was published by Associated Journal Limited (AJL), a public limited company until 2008 when its suspension was announced. It was revived again in 2016.

As per the original complaint in the case filed in 2012, Associated Journal Limited reportedly took a loan of about Rs. 90 crores from Indian National Congress (INC). Dr Subramanian Swamy contended in the trial court that a political party can not lend the money as per respective sections of the Representation of the People Act, 1951 and Income-tax Act, 1961 for the commercial purposes.

Further allegations are, since the loan was not paid back by AJL, Congress leaders Sonia Gandhi and Rahul Gandhi who allegedly held shares in a privately held company called Young India (YI) which was incorporated in 2010, acquired almost all the shareholding of AJL.

It is due to this acquisition that Rahul Gandhi and Sonia Gandhi along with others allegedly became the owners of AJL by virtue of being the shareholders in Young India.

Allegedly, this ownership of Associated Journal Limited got them the ownership of real estate properties in various cities including Delhi, Bhopal, Lucknow, Patna, Indore, Mumbai and Panchkula. The conservative real estate worth of AJL reportedly is calculated at Rs. 5,000 crores.

In sum, it appears that a privately held company Young India was floated to acquire the ownership in Associated Journal Limited with an estimated real estate worth of Rs. 5000 crores in the garb of repayment of a loan worth Rs. 90 crores. Hence, Sonia Gandhi is reportedly ‘Accused No. 1’ in the case and Rahul Gandhi is ‘Accused No. 2’.

Timeline – National Herald Case

Nov 2012 – Dr Swamy filed a complaint in the court at Delhi.

June 2014 – Metropolitan Magistrate found substance in the complaint against all the accused and observed, “it appears that YIL was in fact created as a sham or a cloak to convert public money to personal use“. Defendants filed a plea in the High Court against the summons issued by the magistrate.

Aug 2014 – Metropolitan Court continued with its proceedings and fixed the next date for the hearing.

Dec 2015 – Delhi high court noting the ‘criminal intent’ in the case dismissed the plea of defendants and asked them to appear in person before the trial court.

December 2015– Patiala House Court granted bail to Rahul Gandhi and Sonia Gandhi, and ordered them to appear in the court on the date of next hearing.

February 2016 – Supreme Court exempted all the accused in the case from personal appearances but did not quash proceedings against them.

March 2016 – Trial court allowed the Dr Swamy’s plea to examine balance sheets of INC, AJL and Young Indian from 2010 to 2013

May 2018 – Dr Subramanian Swamy’s application seeking the defendants to verify material filed by him in the National Herald case was denied by the trial court.

Sept 2018 – Delhi High Court dismissed the plea of Congress leader Rahul Gandhi and Sonia Gandhi against the Income Tax Department which wants to re-open their tax assessments for the financial year 2011-12.