National Herald Case: ED Inverted PMLA Process, Court Refuses Cognisance Against Gandhis

A Delhi court on Tuesday refused to take cognisance of the Enforcement Directorate’s money laundering charges against Congress leaders Sonia Gandhi and Rahul Gandhi in the National Herald case, observing that the agency had “simply inverted the template” prescribed under the Prevention of Money Laundering Act (PMLA).

In a detailed 117-page order, Special Judge Vishal Gogne noted that the Central Bureau of Investigation had chosen not to register an FIR on Subramanian Swamy’s 2014 private complaint and that there appeared to be a “long-lasting consensus” between the CBI and the ED until the latter registered an Enforcement Case Information Report (ECIR) on June 30, 2021.

The court said that before registering the ECIR, the ED was likely aware of the necessity of an FIR by a law enforcement agency such as the CBI as the “jurisdictional foundation” for initiating a probe under the PMLA. “Upon first having shared information with the CBI in the year 2014 and then having waited for seven years for the CBI to act, the ED simply inverted the template of money laundering being consequential to the predicate offence by recording its own ECIR,” the judge observed.

Explaining the legal framework, the court noted that the PMLA envisages the investigation of a scheduled or predicate offence as the first step, followed by a probe into money laundering. “Perhaps, the ED should have stayed as staid as the CBI,” the order remarked. A predicate offence, the judge explained, is the original criminal act that generates proceeds of crime, while money laundering involves disguising the origins of those proceeds.

Judge Gogne said this conventional approach was reaffirmed by a 2022 Supreme Court verdict, which held that an FIR in the scheduled offence was a prerequisite for investigating the proceeds of crime. An FIR, the court said, is not a mere formality but “the progenitor of material steps in investigation,” something that cannot be matched by proceedings initiated solely on a complaint.

The court also rejected the notion that the ED could rely on a private complainant to initiate a PMLA investigation. “Certainly, the ED cannot be training or involving individual complainants like Swamy akin to ‘Nodal Officers’ or law enforcement agencies,” the judge said, pointing to issues of locus, capacity, confidentiality and coordination.

Referring to internal records, the judge said the ED itself appeared reluctant to register an ECIR on Swamy’s complaint since 2014, acknowledging the non-viability of a private complaint as the basis for a PMLA probe. This long-held view, the court said, was abruptly departed from when the ED filed its prosecution complaint without an FIR in the predicate offence.

Drawing a sharp distinction between complaint cases and FIR-based investigations, the court observed that they are “chalk and cheese” in terms of evidence collection and conducting a meaningful trial, particularly in complex economic offences and financial frauds.

On the merits of the allegations, the judge clarified that he was not required to go into them at this stage. He noted that the ED was continuing its investigation and had shared information with the Economic Offences Wing of Delhi Police, which subsequently registered an FIR on October 3, 2025.

The court said ongoing investigations by multiple agencies could still lead to additional evidence or accused persons. “Since cognisance has been declined solely on a question of law related to jurisdiction, this order does not efface the existing allegations or curtail further investigation,” the judge concluded.