In a major setback to the Sonia and Rahul Gandhi, the Delhi High Court today dismissed their petition against appearing in court in the National Herald case. The Gandhis have to appear in a Delhi court by 4 pm tomorrow, though the Congress is likely to challenge the High Court's order in the Supreme Court.

The petitioner in the case, BJP senior leader Subramaniun Swamy, will move the Supreme Court to file a caveat in the case so that Sonia Gandhi and Rahul Gandhi don't get a stay in the case.

The Delhi High Court on Friday felt that the Congress party could have written off the loan of Rs 90.25 crore owed to it by the publishers of National Herald, instead of assigning it to a charitable company in which some of its leaders are directors.

Justice Sunil Gaur made the observation while reserving judgement on the pleas of Congress President and the Vice President and four others against a trial court order summoning them on a cheating and breach of trust complaint filed by Swamy.

In response, Senior advocate Kapil Sibal, appearing for the Gandhis, said the loan was assigned to "clean the balance sheets of AJL" and to revive the company so that it can borrow money from the banks and run on its own.

The party had loaned Rs 90.25 crore to Associated Journals Ltd.(AJL), publisher of National Herald, and on December 28, 2010 it had assigned this debt to Young Indian Ltd (YIL), the charitable company, for Rs 50 lakh, which, according to Swamy, amounted to breach of trust and cheating.