National Herald demystified

Now that the initial brouhaha over the National Herald issue has slightly settled down, it is perhaps time for a dispassionate examination of the facts stripped of legalese. What exactly is the criminality in the transactions, if at all there is any During the struggle for independence several newspapers and journals were started in furtherance of that crusade. Among them was the National Herald, launched by Jawaharlal Nehru in 1938.

The newspaper is held by a company called Associated Journals Pvt. Ltd. (AJL). Over the course of time, AJL ran into financial headwinds and was bailed out by the very party that Nehru led for decades, the Indian National Congress. The party extended unsecured loans and advances that totalled up to about Rs 90 crore over a protracted period of time.

AJL was unable to service its liabilities through an assured revenue stream. Anyone familiar with the newspaper publishing business knows that subscription revenues are only a fraction of the cost of bringing out a newspaper. Though National Herald had a good subscriber base, the major income stream of any newspaper is advertising. That is why mass circulating newspapers have four to five full pages devoted to advertisements, sometimes even ahead of the first page of the newspaper. In its editorial line the National Herald articulated the postulates of pluralism, socialism and non-alignment. These are also the core beliefs of the Indian National Congress.

Given the close affinity between the newspaper and the party, advertisers were chary of giving insertions out of fear of being victimised by other political parties when the political wheel turned. Despite these developments National Herald fought valiantly to keep itself alive, but it was a losing battle.

The possibility of Nehru’s National Herald being relegated to the dregs of history appeared quite tangible. At that stage, the leadership of the Indian National Congress with the objective of keeping the legacy of the newspaper alive formed the Young Indian private company (YI) under Section 25 of the erstwhile Companies Act. A Section 25 company is a not for profit enterprise where the promoters or even the shareholders do not get any dividends or income for their endeavours.

This company sought to take over the debt owed by AJL to the Congress Party and, in return, AJL sought to transfer 99 per cent of its shares to YI. This was done to redesign the corporate structure so that National Herald and its holding company could be provided a fresh start with the balance sheet cleaned of all liabilities.

These are the unvarnished facts. Do they smack of mens rea Mens rea is the mental state for a crime to be intentional. It is the critical determinant of any criminal act.

The attempted revival of National Herald that could again be a direct ideological challenge to the forces of fundamentalism, obscurantism and religious revivalism was obviously a cause of concern for the guardians and champions of such interests.

A freshly minted Bharatiya Janata Party member, whose angst against the Congress is fairly well documented by his own writings, television bytes and tweets to require any reiteration, was then catechised or maybe he simply deployed himself to stall the process. This is the genesis of the private complaint filed in the court of a metropolitan magistrate in New Delhi. Now let us examine the averments made in this private complaint.

The main ingredient of any criminal complaint is that there should be a victim or an aggrieved person. In the present set of allegations this ingredient is conspicuous by its absence. Neither the shareholders of AJL nor any member of the Congress Party are aggrieved by the arrangement between YI and AJL.

However, inexplicably, the complainant who has never had anything to do with the Congress Party or AJL seems peeved. Does this not smack of an oblique agenda

The first averment made in the complaint is of cheating under Section 420 of the Indian Penal Code. This provision requires that there be a fraudulent or dishonest inducement of a person by deceiving him to deliver property.

Surely, this “person” cannot by a figment of imagination. Who is this “person” exactly is unknown, because there exists no such person who has been deceived or cheated.

When AJL was in financial difficulty no one came forward to help it for the simple reason that who else except the Indian National Congress would have a stake in its existence It, therefore, begs the obvious question as to how the ingredients of the offence of cheating as defined by criminal law are made out. In other words, who is the person who has been cheated

The second averment that needs to be dealt with is, can it be contended that the money advanced by the Congress Party to AJL cheated the donors of the Indian National Congress The question really should be framed as follows: Is it illegal for a political party to support a newspaper through a Section 25 not for profit company The answer is no. There is nothing either in any section of the Income Tax Act or the Representation of the People Act or for that matter in any other law in force that acts as an estoppel on a political party using its income in any manner. This legal principle has been upheld by the courts in a matter pertaining to investments made by the BJP in Canstar fund (Bharatiya Janata Party vs Deputy Commissioner of Income Tax CIT, 2003).

There is no statutory bar on any political party from investing in any commercial enterprise that can maximise the return on investment. Be that as it may, the aid provided to AJL cannot even be considered a commercial dealing by any yardstick. That is to say, the Congress Party providing an interest-free unsecured loan to AJL can only be construed as an act of bowing to the sentiments of millions of Congressmen to keep the intellectual flame of the freedom struggle blazing.

The next averment made in the complaint is of dishonest misappropriation of property under Section 403, which requires that a person dishonestly misappropriates or converts for his own use any movable property. As clarified earlier, misappropriation must be dishonest. What one needs to ponder over is, if the intent was to dishonestly misappropriate the property of AJL, what was the need to make other office bearers of the Indian National Congress shareholders in YI The answer to this question alone is enough to demolish this contention.

The third averment is criminal breach of trust under Section 405 of the IPC, which requires that whoever is entrusted with property dishonestly misappropriates or converts to his own use, or dishonestly uses or disposes of that property in violation of the directions of law. This averment is also patently incorrect. There is not even a whisper in the complaint or for that matter in both the orders of the trial court or high court that evidences, establishes or even suggests that any property or funds of AJL have been wrongly used either by the non-profit company called YI or its individual shareholders.

All the shareholders of YI are office bearers of the Congress Party and its sympathisers. Given that the object of the exercise was to revive the publication called National Herald, it is within the realm of possibility that if different set of persons were the office bearers of the All-India Congress Committee at the relevant time, instead of the accused persons, these persons obviously would have become the shareholders of YI.

Although the charge of criminal conspiracy was made, no material has been put on record to substantiate the charge.

In conclusion, the timing of the summoning in July 2014, a month after the BJP government came to power, raises disturbing questions. It is almost déjà vu 1977, when a bunch of frivolous cases were registered against Indira Gandhi all of whom were finally thrown out by the courts. Truth will ultimately triumph.

The writer is a lawyer and a former Union minister. The views expressed are personal. Twitter handle @manishtewari