From Our Legal Correspondent
New Delhi: In a dramatic turn of events that underscores the intricacies of India’s legal framework, the Delhi Rouse Avenue Court on December 16, 2025, dismissed the Enforcement Directorate’s (ED) prosecution complaint—equivalent to a charge sheet—against Congress leaders Sonia Gandhi, Rahul Gandhi, and others in the long-standing National Herald case. This ruling comes after years of intense scrutiny, including prolonged interrogations by the ED. Sonia Gandhi faced questioning for over many hours across multiple sessions, while Rahul Gandhi endured more than 50 hours of grilling, highlighting the agency’s aggressive pursuit of the matter. The case, rooted in allegations of financial irregularities, has been a flashpoint in Indian politics, pitting the opposition against the central government’s investigative arms. The court’s decision not only questions the ED’s procedural approach but also raises broader concerns about the balance between enforcement and legal safeguards.
The National Herald case revolves around accusations of financial misconduct in the transfer of assets from Associated Journals Limited (AJL), the publisher of the National Herald newspaper, to Young Indian Private Limited (YIPL). Sonia and Rahul Gandhi hold significant stakes in YIPL. The controversy began in 2012 with a private criminal complaint filed by BJP leader Subramanian Swamy under Section 200 of the Code of Criminal Procedure (CrPC), now Section 223 of the Bharatiya Nagarik Suraksha Sanhita (BNSS). Swamy alleged offenses including cheating, breach of trust, and misappropriation of property.
A trial court took cognizance of the complaint in 2014 and issued summons to the accused. Building on this, the ED registered an Enforcement Case Information Report (ECIR) in 2021 and filed its prosecution complaint under the Prevention of Money Laundering Act (PMLA) in 2025. The ED accused the Gandhis and others of money laundering involving alleged proceeds of crime exceeding ₹2,000 crore.
Special Judge Vishal Gogne’s 117-page order dismissed the ED’s complaint, refusing to take cognizance of it. The court’s primary legal reasoning centered on the foundational requirements under the PMLA, emphasizing that a prosecution complaint for money laundering cannot proceed without a First Information Report (FIR) for the underlying “scheduled offense” or predicate offense.
Under Section 3 of the PMLA, money laundering pertains to dealing with “proceeds of crime” stemming from a scheduled offense, such as cheating under Section 420 of the Indian Penal Code (IPC) or criminal breach of trust. The ED’s jurisdiction to investigate and prosecute hinges on the existence of such an offense. However, in this case, the ED relied solely on Swamy’s private complaint—a “complaint case” under the CrPC—and the subsequent 2014 summoning order, rather than a police-registered FIR.
The court held that a private complaint, even if it discloses a scheduled offense and leads to cognizance by a court, does not suffice to confer jurisdiction on the ED to initiate an ECIR or file a prosecution complaint. As articulated in the order: “An investigation and the consequent prosecution complaint pertaining to the offence of money laundering… is not maintainable in the absence of an FIR for the offence mentioned in the Schedule to the Act.”
This created a jurisdictional flaw from the outset, rendering the ED’s entire investigation and complaint impermissible under law. Importantly, the court did not delve into the merits of the allegations, deeming such an examination premature. It noted that the Delhi Police Economic Offences Wing (EOW) had recently registered an FIR in the matter, which could potentially provide a new basis for proceedings.
This ruling represents a significant setback for the ED and the Ministry of Finance’s Department of Revenue, which oversees the agency. It invalidates years of investigative efforts on technical grounds, potentially affecting similar cases where the ED has relied on private complaints. While not a commentary on the substance of the charges, it serves as a judicial reminder of the need for strict adherence to procedural norms.
Legally, the dismissal does not spell the end of the National Herald saga. The ED retains the option to file a fresh or supplementary prosecution complaint, now bolstered by the EOW’s recent FIR, which addresses the predicate offense requirement. This could restart the PMLA proceedings, allowing the agency to pursue the money laundering angle afresh. Additionally, the ED may appeal the court’s order to a higher bench, arguing an alternative interpretation of PMLA provisions regarding the necessity of an FIR versus a private complaint.
However, any appeal would need to convincingly demonstrate that the lower court’s interpretation is erroneous. The ongoing trial based on Swamy’s original complaint continues unaffected, focusing on the IPC offenses rather than money laundering. For the accused, this provides temporary relief, but the case’s trajectory remains uncertain, potentially dragging on through appeals and further investigations.
The court’s rebuke opens the door for the accused to explore civil remedies against the ED, particularly claims of defamation or malicious prosecution. Under Indian law, malicious prosecution requires proving that the proceedings were initiated without reasonable or probable cause, with malice, and resulted in acquittal or dismissal, causing damage to the plaintiff (as per Section 499 IPC for defamation and tort principles for malicious prosecution).
In this context, the Gandhis could argue that the ED’s complaint lacked jurisdictional basis from the start, suggesting a lack of reasonable cause. The prolonged questioning—over 50 hours for Rahul and extensive sessions for Sonia—could be cited as evidence of harassment, potentially amounting to malice if politically motivated. Successful claims would hinge on demonstrating that the ED acted beyond its legal remit, perhaps influenced by extraneous factors.
However, such suits face hurdles: Investigative agencies enjoy qualified immunity under statutes like the PMLA, and proving malice against a government body is challenging. Courts often require concrete evidence of bad faith. Defamation claims might focus on public statements or leaks from the ED that damaged reputations. While feasible in theory, these actions could prolong the legal battle, serving more as a counter-strategy than a guaranteed win.
The Delhi Court’s rejection of the ED’s charge sheet in the National Herald case marks a pivotal moment, exposing procedural vulnerabilities in high-profile enforcement actions and affirming the judiciary’s role as a check on executive overreach. For the Gandhis, it offers respite after grueling interrogations and years of legal entanglement, while for the ED, it signals the need for meticulous compliance with legal prerequisites. As the case evolves—potentially through fresh filings, appeals, or counter-suits—it underscores the enduring tension between anti-corruption drives and safeguards against misuse of power. In India’s vibrant democracy, such verdicts remind us that justice, though delayed, must always be rooted in the rule of law.
