National Herald case decoded: What Tuesday’s rulings mean for Gandhis

New Delhi: Two court orders in the National Herald matter on Tuesday have added to the public confusion because they deal with two different “cases” that are connected but not identical.

At the centre is this basic split, one track is the Enforcement Directorate’s money-laundering case under the Prevention of Money Laundering Act (PMLA), and the other is a Delhi Police case for the alleged underlying offences, often called the “predicate” or “scheduled” offence.

The first development was in the ED’s PMLA case. Special Judge Vishal Gogne of Rouse Avenue Courts refused to take cognisance of the ED’s money-laundering prosecution complaint against Rahul Gandhi, Sonia Gandhi and others, saying the filing was based on an investigation into a complaint by a private person and “not on an FIR of a predicate offence”, making cognisance “impermissible in law”. 

While reading out the operative part, the judge also noted that Delhi Police’s Economic Offences Wing has already lodged an FIR in the matter, and therefore it would be premature to decide the ED’s arguments on merits at this stage.

The ED said it would file an appeal against the order. 

The second development was on the Delhi Police track. In separate proceedings, the same special judge set aside a magistrate court’s earlier direction to provide the accused a copy of the EOW FIR. 

The court held the accused are not entitled to be given the FIR copy, although they may be informed that an FIR has been registered. 

So what exactly is confusing here? 

The “ED chargesheet”, the “FIR”, the “private complaint”, and the “predicate offence” are not interchangeable labels for the same thing.

ED’s filing is often called a “chargesheet”. But under PMLA, the ED files a prosecution complaint before a special court. That complaint is the document on which the court is asked to take cognisance and proceed. The court, on Tuesday, refused to take cognisance on that filing in its present form. 

The “private complaint” refers to how the original criminal proceedings began years ago. Several reports have noted that the ED’s investigation started in 2021 after a metropolitan magistrate took cognisance of a private complaint filed by BJP leader Subramanian Swamy in 2014. 

The “predicate offence” is the underlying offence that is alleged to have generated proceeds of crime. In PMLA language, it is typically a scheduled offence. The court’s reasoning, as reported, is that the ED’s present filing is rooted in a private complaint route and not in an FIR of that predicate offence. 

This is where the new Delhi Police FIR becomes important. According to Bar and Bench’s report, Delhi Police EOW registered an FIR on October 3 naming the Gandhis and others, and the FIR was based on information provided by the ED under Section 66(2) of PMLA. 

Section 66(2) allows the ED, if it believes another law has been contravened, to share information with the “concerned agency for necessary action”. 

Put simply, this is how the pieces fit together.

The ED’s case is the money-laundering case. For that case to move forward smoothly, the existence of a clear underlying offence is usually central because laundering allegations are built on the claim that proceeds were generated from that underlying offence.

The Delhi Police FIR is the police case for that underlying set of offences. That police case is investigated and may later result in its own chargesheet under criminal law.

This week, the court has made two things clear, at least at the present stage. First, it is not allowing the ED’s PMLA complaint to progress on cognisance as filed, because of the way the predicate offence foundation is described in the order. 

Second, it is not permitting the accused to demand a copy of the newly-registered police FIR through that magistrate order. 

So, where is the case right now?

The ED’s prosecution complaint has hit a procedural roadblock at the entry point because cognisance has been refused. That does not mean the allegations have been tried or decided. It means the court is not, as of now, moving forward on that complaint in the way the ED wanted. The ED has said it will challenge the order in appeal. 

Separately, the Delhi Police FIR track continues to exist. The FIR is registered, and the police investigation can proceed. The accused, at this stage, do not get the FIR copy through the route that was attempted, as per the special judge’s order. 

That brings us to the politics around the “big win” claim.

Congress can claim a “big win” because the headline outcome most readers notice is this - the court has refused to take cognisance of the ED’s filing for now. For a party battling a high-profile ED prosecution, blocking the case at the cognisance stage is a major procedural relief, and it also allows the party to argue that the court has flagged a basic legal flaw in how the case is being carried forward. 

But it is not the end of the matter. The ED has indicated it will appeal.

And the predicate-offence track now exists in the form of the October 3 EOW FIR, which is itself a significant development in the wider litigation. 

In other words, Congress’s “win” is real in the narrow sense that the ED’s PMLA complaint has been stopped at the threshold for now. But the larger legal battle continues on both tracks: the ED is expected to challenge the order, and the Delhi Police FIR case remains live.