SC refuses to stall National Herald trial

Says no justification for stay at this stage, but exempts Sonia and Rahul Gandhi from personal appearances

The Supreme Court on Friday refused to stall the trial court proceedings in the National Herald case. Hearing a special leave petition by Congress leaders Sonia Gandhi and Rahul Gandhi, a Bench comprising judges J S Khehar and C Nagappan said it found no justification in interfering in the trial at this stage.

However, it directed the expunction of all inferences and conclusions made by the Delhi High Court in December, while rejecting a petition by the Gandhis. It also allowed the Gandhis exemption from personal appearance in the trial court considering the position they occupied and the inconvenience their appearance could cause to the public.

SC’s OBSERVATIONS

• The Bench, comprising judges J S Khehar and C Nagappan, finds no justification in interfering in the trial
• It directs the expunction of all inferences and conclusions made by the Delhi High Court in December
• Allows the Gandhis exemption from personal appearance in the trial court

Earlier, senior counsel Kapil Sibal raised various arguments questioning the merit of the charges made by Bharatiya Janata Party (BJP) leader Subramanian Swamy that are being considered by the trial court.

Swamy has alleged various offences, including fraud and breach of trust in a restructuring of National Herald’s ownership. The transaction involved assigning of loans worth Rs 90 crore  given to National Herald’s parent company The Associated Journals (AJL) to a non-profit entity called Young Indian floated by professionals and Gandhi family loyalists Suman Dubey and Sam Pitroda. AJL issued shares amounting to 99.8 per cent stake to Young Indian in lieu of this assigned loan. In the last leg, the Gandhis took over control of Young Indian acquiring 76 per cent shareholding between themselves. Swamy alleges the entire transaction is a fraud on original shareholders of AJL and is aimed at grabbing the substantial real estate assets of AJL including capital’s Herald House, which he says is worth Rs 1, 600 crore.  

Sibal dwelt on issues such as the legality of the interest free loans given by the Congress and how there was no complaint of breach of trust. “Whose trust have I breached?” Sibal asked.

Senior counsel Abhishek Manu Singhvi said in a (IPC Section ) 420 case there should be a victim and a perpetrator. But, in this case, Swamy was not the one who is aggrieved and the millions of Congress workers are not complaining, Singhvi said.

Judge Khehar said, “You have ample opportunity (to argue) at the stage of framing of charges.”

The Gandhis had objected to various inferences in the Delhi High Court order in December describing their conduct as "questionable" and that with "criminal intent".

The judge added, “We will set aside all the inferences and conclusions made by the (High Court) judge. He has drawn conclusions and prejudiced the trial.”

While Swamy did not object to this, on the matter of personal appearance, he referred to the court’s earlier judgments, which held that the matter of personal appearance in court should be decided by the magistrate.

However, the court decided that in view of the special circumstances, including the position held by the petitioners, it would be fit to exempt them from personal appearance. “Presence of petitioners would cause more inconvenience than convenience,” the court said. However, the trial court can demand their appearance, if necessary.

Security had to be tightened as chaotic scenes had ensued in the streets of the capital when the Gandhis and senior congress leaders decided to walk down to appear in the Patiala house trial court proceedings in December.

Both sides claimed victory after the proceedings. Swamy highlighted the fact that the plea to quash the trial was not upheld.  In a press release issued later, Sibal said, “It is now clear that neither Dr Swamy nor those inimical to the Congress party can rely on any prima-facie observations or findings of any court and allege that the office bearers of the Congress party, including  its president, vice-president and others have committed any illegality or wrong doing.”