Is India’s Rahul Gandhi headed for jail?

The vice-president of the country's Congress party could find himself taken into judicial custody following a court appearance on December 19. He and his family stand accused of cheating, breach of trust and misappropriation of funds.

Indian Congress party vice-president Rahul Gandhi (L) and Congress president Sonia Gandhi talk during a rally in New Delhi on April 19, 2015. Sajjad Hussain/AFP Photo

NEW DELHI // In a week’s time, Rahul Gandhi, vice-president of India’s Congress party, may find himself headed for jail.

He and his family, among the most powerful in India’s political establishment, stand accused of cheating, breach of trust and misappropriation of funds.

Congress party sources say that Mr Gandhi, 45, will not choose bail if he is taken into judicial custody following a scheduled court appearance on December 19, according to local media reports.

His mother Sonia, the party president, will opt to file for bail on account of her poor health.

Mr Gandhi’s preference for jail is aimed at sparking sympathy in an attempt to stave off deep political damage from a lawsuit filed against the Gandhis by a political opponent.

Mr Gandhi and his mother have been summoned to appear in Delhi's Metropolitan Court, accused of cheating and misappropriating funds during their takeover of the National Herald newspaper.

The Delhi-based newspaper was acquired by the Gandhis in December 2010. Four close associates of the family have also been named as defendants in the lawsuit.

Congress MPs have stalled parliament with loud protests ever since the court summons was issued on Monday. They allege that the lawsuit is part of a campaign orchestrated by the ruling Bharatiya Janata Party (BJP) to discredit Congress.

On Tuesday, Mr Gandhi, who was touring the flood-hit city of Pondicherry, told reporters: “Absolutely I see a political vendetta. This is the way the central government functions, the way they think.”

The lawsuit was filed in 2012 by Subramanian Swamy, who then led the Janata Party. Dr Swamy, an economist and a maverick politician, joined the BJP in 2013. He has a long history of filing lawsuits against corruption, always choosing to argue them himself with assistance from his wife Roxna, a lawyer.

The lawsuit against the Gandhi family involves the activities of Young Indian, a non-profit founded by the family in November 2010.

A month later, Young Indian acquired a company called Associated Journals Limited (AJL), which owned the National Herald, a poorly selling newspaper that went out of print in 2008.

The paper was established in 1938 by Jawaharlal Nehru – a titan of the Congress party, and Mr Gandhi’s great-grandfather.

Before Young Indian bought AJL, the National Herald owed Congress 900 million rupees (Dh49.3m), a debt accumulated from numerous interest-free loans that the party had advanced to the newspaper in the late 2000s.

In his lawsuit, Dr Swamy alleges that once the Gandhis had founded Young Indian, they used their control of Congress to have the party "sell" the National Herald's 900 million rupee debt to the non-profit, in exchange for a one-time payment of 5 million rupees.

Once the newspaper's debt had been sold to Young Indian, the directors and chairman of AJL – Congress associates of the Gandhis – transferred 99 per cent of the company to the non-profit. In return for this stake in AJL, Young Indian wrote off the National Herald's 900 million rupee debt.

With this stake in ADL, Young Indian acquired the company’s real estate assets in Delhi, the neighbouring state of Uttar Pradesh, and other Indian cities. Although these assets have not been independently valued, Dr Swamy estimates their worth to be anywhere up to 50 billion rupees.

Dr Swamy's lawsuit contends that Congress' loans to National Herald were illegal, because, according to his interpretation of the law, political parties are not allowed to divert or lend funds to commercial entities. Further, it argues that the Gandhis abused their positions of power to gain AJL's assets.

These assets include National Herald House, a building with roughly 100,000 square feet of office space in the heart of central Delhi.

Since 2012, when the suit was first filed, the Gandhis have submitted repeated pleas against being summoned to court, where they will be required to testify under oath. But the judiciary’s patience has worn thin.

In dismissing the latest such plea on Monday, the Delhi high court observed that the Gandhis’ behaviour “smacks of criminality”, and directed them to comply with the metropolitan court’s summons to appear in person.

In legal arguments, the Gandhis’ lawyers have claimed that Dr Swamy has no right to pursue this lawsuit, since he was not a victim of any breach of trust that may have happened.

They have also said that, contrary to Dr Swamy’s arguments, money donated to Congress can be disposed of as the party wishes, and that the loans were advanced to AJL because of the long shared history between the party and the company.

Despite Mr Gandhi’s reported willingness to go to jail, however, the court is unlikely to take such a prominent politician into judicial custody while the trial is ongoing, said Peer Mohammed, a Chennai-based political analyst.

While testifying under oath may result in some uncomfortable revelations being made public regarding Mr Gandhi and his mother, Mr Mohammed said he doubted whether a conviction was a likely outcome, given the numerous legal ambiguities surrounding the case.

“Even if they are convicted, I don’t see their hold on power slipping too much,” he added. “In the eyes of the law they may be disqualified from parliament. But convicted politicians in India have controlled political parties before, and it may happen once again with the Gandhis.”