The National Herald case: SC stays eviction, issues notice to Centre

Mere transfer of the company’s majority shares to Young Indian would not make Rahul Gandhi and Sonia Gandhi the owners of the Herald building, the counsel of Associated Journals Limited argued.

The Supreme Court on Friday stayed the eviction and further proceedings against Associated Journals Limited (AJL), the publishers of The National Herald newspaper started by former prime minister Jawaharlal Nehru in 1938 to advance the freedom movement, from a centrally located building in the National Capital.

A Bench led by Chief Justice of India Ranjan Gogoi ordered the stay of proceedings against AJL under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 till further notice.

The AJL had moved the apex court after the Delhi High Court dismissed its appeal against a Single Judge order upholding an order of eviction passed by the Centre's Land and Development Office (L&DO).

The Centre decided to end the 56-year-old perpetual lease and evict AJL from the premises on the ground that the latter was not conducting any printing or publishing activity — the ostensible objective for which the building was allotted in 1962. The L&DO had wanted the AJL to hand over possession by November 15, 2018. The eviction order claimed the building was used solely for commercial purposes.

The Centre had highlighted in the high court how there was a transfer of 99% shares in the AJL to Young Indian (YI), a charitable company in which Congress president Rahul Gandhi and his mother Sonia Gandhi are majority stakeholders. Young Indian’s purchase of 99% stakes in AJL along with the publisher's ₹90 crore pending dues to the Congress party for a mere ₹50 lakh amounts to a “virtual” sale of the Herald building at ITO, the High Court had agreed with the government.

The High Court had concluded that the transfer of stakes and debts to YI, which is using the building for commerical ends, amount to violation of the conditions of the lease.

“We have no hesitation in holding that the entire transaction of transferring the shares of AJL to Young India was nothing but, as held by the learned writ Court, a clandestine and surreptitious transfer of the lucrative interest in the premises to Young Indian,” the High Court had surmised.

The High Court found that by transfer of AJL's 99% shares to YI, the beneficial interest in its property worth ₹413.4 crore stands “clandestinely” transferred to YI.

“Lift the corporate veil to see that there is virtually a sale of 99% stakes from AJL to YI,” Solicitor General Tushar Mehta submitted for the government on Friday.

“We have to first see whether this transfer of shares will be a violation of the lease conditions,” Chief Justice Gogoi observed, giving four weeks to the Centre to respond to the petition filed by AJL.

AJL counsel and senior advocate A.M. Singhvi has argued that mere transfer of the company’s majority shares to YI would not make the Gandhis, the owners of the Herald building. He also contended that publishing of some of its online editions had already commenced and the Centre never raised the issue of lack of printing activity at the Herald building prior to June 2018.

AJL said the “eviction proceedings have been initiated for the purposes of scuttling the voice of democratic dissent of the Congress party.”

The petition, filed by advocate Sunil Fernandes, submitted that eviction was a deliberate attempt to suppress and destroy the legacy of Pandit Nehru, who was the “guiding light for the publications of the company.”

AJL said one of the “favourite propaganda” of the party currently in power is to “blame Pandit Nehru for almost everything that ails the nation.”

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Printable version | May 27, 2020 3:11:48 AM |

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