The issue of whether the Enforcement Directorate (ED) can register a money laundering case even in the absence of a First Information Report (FIR) is all set to be brought before the court in the National Herald case. The Congress has contended that the agency is proceeding without an FIR for the scheduled offence under the Prevention of Money Laundering Act (PMLA).
Now, the point of contention of the defence before the competent court would be whether the agency was empowered under the PMLA to register the ECIR without an FIR, said senior advocate Ramesh Gupta, who has represented the Congress leaders in the case.
The ED’s initial position over seven years ago was that an FIR was mandatory to register an Enforcement Case Information Report (ECIR). However, sources said, it was overturned by a subsequent circular that allowed the agency to also do so in matters where a magistrate had taken cognisance of a scheduled offence without an FIR, in line with what the complainant, BJP leader Subramanian Swamy, has argued.
According to documents reviewed by The Hindu, the agency had in January 2015 concluded that: “... for registering the Enforcement Case Information Report (ECIR), the requirement of First Information Report (FIR), under Section 154 of Code of Criminal Procedure, 1973 and its forwarding to a Magistrate under Section 157 of Code of Criminal Procedure, 1973 (2 of 1974), is essential”.
The issue at hand was whether the “registration of Enforcement Case Information Report (ECIR), in respect of Scheduled Offence case where the Magistrate has taken cognisance but First Information Report (FIR) has not been registered…”.
However, the initial position of the agency was overturned within months, later paving the way for an ECIR about nine months ago after a court took cognisance of charges against Young Indian Limited (YIL), Congress chief Sonia Gandhi, Rahul Gandhi and others, based on Dr. Swamy’s court complaint.
Earlier, having filed the complaint before a magistrate’s court in Delhi’s Patiala House in February 2013, Dr. Swamy had written to the ED in July 2014 seeking a money laundering probe.
Dr. Swamy’s complaint alleged that assets of Associated Journals Limited (AJL) were fraudulently acquired by not-for-profit company YIL, in which Ms. Gandhi and her son owned 38% shares each. YIL paid ₹50 lakh for getting the rights to recover about ₹90-crore debt of AJL owed to the Congress on account of interest-free loans given by the party during 2000-2011, as alleged.
Income Tax order
Now, the ED is continuing with its probe even as the trial court proceedings in Dr. Swamy’s complaint have been stayed by the Delhi High Court, which is in the middle of deciding whether an Income Tax Assessment Order (AO) from 2017 can be introduced as evidence.
Dr. Swamy had filed an application to introduce this AO in his case during his cross-examination, saying it corroborated the allegations in his complaint. The court had agreed but held that this could happen only after his cross-examination.
Challenging this decision, Dr. Swamy had approached the Delhi High Court with a request to stay the trial court proceedings until it was decided whether the AO could be introduced immediately. The stay was granted.
Amid this, the ED approached the Special court hearing Dr. Swamy’s case on April 30, with an application seeking certified copies of Income Tax department documents, which, sources said, included the tax proceedings and investigation undertaken for issuing the above-mentioned AO. While asking the ED to give a copy of its application to the accused, the Special court listed the matter for next hearing on May 30.
On May 30, the ED appeared in court only to submit that it had now acquired the papers and withdrew its application. What followed on June 1 was the ED summonses to Mr. Gandhi and Ms. Gandhi.
