New Delhi, Feb 11 (IANS): The Central government on Monday told the Delhi High Court that Young Indian company, in which Congress President Rahul Gandhi and his mother Sonia Gandhi are shareholders, was formed with an intention to take over Herald House.

The court was hearing the Associated Journals Ltd (AJL) -- which publishes National Herald newspaper -- appeal challenging the December 21 order of a single judge dismissing its plea against the Urban Development Ministry's October 30 direction that AJL's 56-year-old lease on Herald House was over and that it should vacate.

The single judge in its order on December 21 had noted that by transfer of AJL's 99 per cent shares to Young Indian company, the beneficial interest of AJL's property worth Rs 413.40 crore stands clandestinely transferred to Young Indian company.

Solicitor General Tushar Mehta told a division bench of Chief Justice Rajendra Menon and Justice V. Kameswar Rao that AJL "clandestinely" transferred its majority shares to Young Indian and requested the court to dismiss AJL's appeal.

He also told the court that AJL has violated the lease agreement and asked the court to lift the corporate veil. He also said that the Gandhis are directly liable for the defaults in the company.

However, Senior Advocate Abhishek Manu Singhvi defended AJL and denied the allegations.

He also told the court that the digital version of the newspaper was started on November 14, 2016, while the publication of weekly "National Herald on Sunday" was resumed on September 24, 2017.

The government has said that National Herald was revived only after the Centre sent a notice for inspection of the property in September 2016.

The court listed the matter for further arguments on February 18.