A brief background of just the legal points might be necessary. I am going to use the Delhi High Court’s judgment on Dec 7th, as my primary text here. Here’s the.
THE ACTUAL COMPLAINTS:
Dr. Swamy was highly aggressive with his legal campaign against the Gandhis, unlike any other case he had been prosecuting prior to this. Bear with me on some required legalese here:
1. Dr. Subramanian Swamy alleges that an interest free loan of Rs 90.25 cr was extended by the Congress party, over many allocations, to Associated Journals Limited (AJL), which owns the National Herald newspaper.
- As a first point, he contends that a party cannot lend money for commercial purposes, as it is in violation of Section 29 A to C of the Representation of the People Act, 1951
- He additionally contends that the loan itself was never repaid, and that by itself, is in violation of the law (Section 269T of the Income Tax Act, 1961)
2. Dr. Swamy also makes the indictment that the company Young Indian was floated as aSpecial Purpose Vehicle, to acquire almost all the shareholding of AJL and its properties (both movable and immovable), and that this constitutes a criminal breach of trust of the shareholders
3. In addition to this, Dr. Swamy has also leveled offenses against the petitioners (Sonia Gandhi, et. al), in violation of the law, for offenses under sections 403 (), section 406 ( ) and of course, section 420 ( ) read with Section 120-B of IPC.
LEGAL EVENTS THUS FAR:
1. Dr Swamy approaches the Delhi trial court on Nov 1, 2012, with the complaints above
2. Congress responds on Nov 2, 2012, that the purpose for extending the loan of Rs 90 cr had no commercial interest, since the National Herald was a newspaper which needed reviving
3. The court begins proceedings and finds that there is enough evidence to establish aprima facie case against the accused
4. The Patiala house court then issues a summons against all the accused and asks them to defend themselves against the allegations made, on 26 June 2014
5. The defense, mostly represented by(defending Rahul Gandhi) and (defending Sonia Gandhi), appeals in the Delhi High court, to quash the issuance of the summons itself
6. Then began some drama of judges recusing themselves, and a host of injunctions and stays, all intended to prolong the duration of the case
7. Swamy decides he’s had enough, and approaches the Supreme Court to request a speedy trial of the case. The case then finally got assigned to Justice Sunil Gaur (who was the same judge that made the now famous pronouncement of the Delhi high court verdict). Gaur gets switched out for a temporary period, and then is assigned back on the case
8. This high court judge then dismissed the appeal to quash the summons by the counsels representing the Gandhis
9. The Gandhis now need to be present in court on Dec 19, 2015, in order to defend themselves, during the bail hearing section of the proceedings
FACTS FAVORING THE PROSECUTION:
Now, I’m going to use the entire high court dictat to highlight my reasoning for thinking there may be a case for sending the Gandhis to jail. One can only try to do a deep dive into the court’s attitudes while considering this, based on inferences from actual texts.
1. Abhishek Manu Singhvi’s entire set of arguments can be best summarized as:
- No conversion or appropriation by Young Indian (Y.I) can be done to benefit someone, since it is a Section 25 Company – barred from giving any benefit, salary, remuneration, dividend etc to its shareholders
- All properties owned by AJL remains in ownership of AJL; Only shareholders of AJL change. By law, shareholders of a company do not own properties owned by the company
- No person or entity (thus far) claims to be deceived or cheated as a victim
- The balance sheet of AJL and Y.I. shows:
- that the property of AJL remains property of AJL
- that rent received from AJL is also property of AJL
- AJL is a loss making company, so neither Y.I. nor accused (the Gandhis) can get any dividend.
- Y.I’s balance sheet similarly shows nil income received
On the face of this, the majority of it sounds like incredibly well presented bullshit to me. (What does it mean that the property of AJL will remain the property of AJL and not the shareholders? Isn’t AJL now a fully owned subsidiary of YI? What happens on liquidation? Why didn’t they liquidate the AJL assets in the first place upon making losses?)
2. Now here is the trial court’s exact judgment while issuing summons:
“From the complaint and the evidence led so far it appears that YI was infact created as a sham or a cloak to convert public money to personal use or as a special purpose vehicle for acquiring control over `2000 crores worth of assets of The AJL and since all the accused persons have allegedly acted in consortium with each other to achieve the said nefarious purpose/ design, there are sufficient grounds for proceedings against all of them. ”
The first line gives away the magistrate’s thought about this process. It looks like the court’s inclination might be to view this from the side that there indeed has been a scam, and one that’s prosecutable.
The Delhi high court too, admitted that the judge’s pronouncement above was reaching a bit too far.
“Upon scrutiny of the impugned order, this Court is constrained to note that thepresumptive observations made by the trial court are uncalled for and such a deeper scrutiny of facts is not required to be undertaken at this initial stage”
Now, if it’s a fair assumption to make, that if the judgment was proclaimed in pretty strong terms, right at the summons stage, then it could be a reflection of how the court views this case. It might indicate, that after the charge stage (the stage after summons), the court might pronounce a favorable judgment to Swamy, if the rest of the case proceeds along the same arguments.
COURT STATEMENTS THAT FAVOR CONVICTION:
Now, finally, let’s take a look at the most interesting aspect of all of this. The attitudes and mindsets of the courts, reflected by the two judgments so far.
This is what the Delhi high court judge, Justice Sunil Gaur, noted in the indictment issued. Just applying plain logic here, it looks to me that a few things can be inferred about the mindset of the court, about this matter so far:
1. The court thinks that the summary put forth by the defense (Abhishek Manu Singhvi), does not provide adequate explanation:
“Considering the fact that AJL has sizeable assets of `2000 crores, it needs to be explained by petitioners as to what was the need to assign the huge debt of `90 croreswhen this debt could have been easily liquidated by AJL from its sizeable assets. Even writing off such a huge debt by the Congress Party can legitimately attract allegations of cheating, fraud, etc..Petitioners had gone step further in conspiring to get this huge debt assigned to a Special Purpose Vehicle i.e. Y.I. and thereafter, to hijack AJL via Y.I.. Such grave allegations levelled against petitioners cannot be brushed aside lightly by relying upon judicial precedents cited, to conclude that the ingredients of the criminal offences alleged are lacking”.
2. The judge thinks Subramanian Swamy has presented facts in a half-baked manner so far, and that it will get better as the process continues:
“At present, the facts are half baked in the sense that one side of the picture is emerging but upon taking the case of respondent-complainant on its face value, it cannot be prima facie said that the ingredients of the offenses alleged are lacking”.
3. The court also thinks there is more than enough evidence for a prima facie case, and, to me, this means if the facts are presented in a fully formed manner during the charge stage, then it could actually result in prosecution of the Gandhis – hopefully Swamy has done all his homework. This is the most important part of the whole case
4. The court also thinks that Singhvi’s legal maneuvering itself wasn’t enough to provide a sufficient, full explanation so far, and expresses doubt concerning the accounting practices followed:
“Such a view is being taken as it needs to be explained before the trial court as to how the net worth of AJL can be negative when it has assets worth crores of rupees. It also crops up in the mind of a prudent person as to why interest free loan was assigned and why it was not written off. In any case, writing off such a huge debt by a legendary political Party is indeed questionable”
5. The court also thinks nothing presented so far by the defense’s counsel explains why the shareholders weren’t consulted prior to the general body meeting:
“It also needs to be answered as to why the genuine shareholders were marginalized in the Extraordinary General Meeting, which was attended by just seven shareholders. Such a questionable conduct of petitioners certainly invites allegations of committing the offences for which petitioners have been summoned. Is it not criminal misappropriation of Congress Party’s funds?“
6. And finally, that the judge thinks Swamy has a really good case:
“Upon reading the complaint as a whole, it emerges that the transactions of the Congress Party with AJL via Y.I. are not mere commercial transactions as these transactions legitimately attract the allegations of cheating, fraud, breach of trust, misappropriation“
7. And of course, the now famous, most-quoted part of the judgment also indicate a mindset along the same line as the above:
“After having considered the entire case in its proper perspective, this Court finds no hesitation to put it on record that the modus operandi adopted by petitioners in taking control of AJL via Special Purpose Vehicle, i.e., Y.I., particularly, when the main persons in Congress Party, AJL and Y.I. are the same,evidences a criminal intent. “
It’s extremely hard to say at this point exactly what will happen, so the wisest thing to do is to avoid making a conclusion. However, from my reading at least, it appears that Swamy has a really good case for sending the Gandhis to jail.
This also explains all the shenanigans in the Parliament, no doubt. Kapil Sibal and Abhishek Manu Singhvi, being really smart men, will have realized some of this (and probably a whole lot more), by themselves. But they will also probably realize that they can present much stronger cases by revising their arguments after the high court verdict on the summons.
It’s not clear yet what arguments will be used in the future, but considering that the trial court already has been subjected to a slew of facts, legal precedents, and arguments, by both sides, chances are, the defendants won’t have much new ammunition to offer, aside from some cross examination. Singhvi and Sibal could still come up with arguments that bring more canon-fire and this might stop the Gandhis from being prosecuted.
A whole lot depends on Swamy’s presentations of facts, the government’s interim findings (), complaints from other shareholders, and newer developments.
The emergence of Shanti Bhushan and Justice Marandey Katju’s (and ten others who intends to approach the company law board) interests in the case, on account of their predecessor’s owning shares in AJL evidences new things that could challenge Singhvi’s arguments about having received no complaint of cheating thus far. So could this fresh new development, found as a result of state investigations:
Swamy’s team is very well represented, but I hope he has more firepower than the things presented until just now. Hopefully he can make good upon this promise, based upon this admission from Twitter:
Caveat: One thing that could derail this, is that Swamy has not proceeded with dry legal arguments alone, and tends to be dramatic in court – this might turn the tide of the issue from being a legal case, to a much weaker ethical one.
Hopefully, this will send the Gandhi family to jail, and (in my prejudiced view), quite deservedly. But as evidenced by Gurumurthy’s very insightful article (), the government does need to do more, to assist Swamy.
At the very least, India owes Dr Subramanian Swamy a huge debt of gratitude, for preventing a possible scam that could have denigrated an already scam filled nation. The man’s moral courage has been unparalleled.
VERY FEASIBLE AND GOOD
If politicians like chautala, laloo yadav, jayalalita, etc. can have go to jail, then why the congress leadership cannot go inside jail.
the same congress leadership is also responsible for 2G, CWG,national herald,etc. however, all thise are cases of indirect corruption where we may succeed jailing people like kalmadi, but we may never get to the top of the leadership in such cases.
APART from this one scam, there are other scams where gandhis went unfortunately free. one knows whether they will ever face prosecution,either from subramanium swamy or prashant bhushan.
If these people go to jail, this may be good for congress as they can throw out this stupid leadership and get a much better leadership. This new leadership will have to come independently of the gandhis and this has to be supported by other leaders of the congress.