Delhi High Court Quashes ED Action Against NewsClick

The Delhi High Court has quashed the FIR filed by the Economic Offenses Wing (EOW) and the money laundering investigation by the Enforcement Directorate (ED) against NewsClick and its founder-editor Prabir Purkayastha. Justice Neena Bansal Krishna stated that the actions were an arbitrary misuse of power targeting independent and impartial journalism. The court observed that the investigation agencies conducted extensive probes without substantial evidence and noted that even if the allegations in the FIR were accepted as true, they did not constitute a criminal case of fraud or breach of trust. The court further highlighted that fraud cases require an identifiable complainant, which was absent in this matter.

The case originated in August 2020 when Delhi Police registered an FIR against NewsClick, alleging that the portal received ₹9.59 crore in foreign direct investment (FDI) from a US-based company, Worldwide Media Holdings LLC, at a premium price of ₹11,510 per share for shares valued at ₹10 each. It was alleged that this transaction aimed to bypass the 26% FDI cap in Indian media. Following this, the ED conducted searches under the Prevention of Money Laundering Act (PMLA), seizing foreign currency, documents, and digital evidence. The ED's investigation revealed that NewsClick received ₹38.05 crore in foreign funds over three years, including ₹9.59 crore through FDI and ₹28.46 crore from service exports.

In August 2023, BJP MP Nishikant Dubey cited a New York Times report in Parliament, accusing several journalists of spreading Chinese propaganda. Subsequently, on 17 August 2023, a case was registered against NewsClick under the Unlawful Activities (Prevention) Act (UAPA) and IPC sections 153A and 120B. On 3 October 2024, Prabir Purkayastha was arrested based on this case. Delhi Police questioned 46 individuals and conducted searches at 31 locations linked to NewsClick and its journalists. Five agencies, including the ED, were involved in the investigation.

NewsClick, an online news portal operated by PPK NewsClick Studio Private Limited, was founded in 2009 by Prabir Purkayastha, who also serves as its editor-in-chief.

Key Points

• Delhi High Court quashed FIR and ED investigation against NewsClick and Prabir Purkayastha.
• Court termed the actions as arbitrary misuse of power against independent journalism.
• FIR alleged ₹9.59 crore FDI received at inflated share prices to bypass FDI limits.
• ED investigation revealed ₹38.05 crore in foreign funds over three years.
• Multiple agencies, including ED, investigated the case; Prabir Purkayastha was arrested in October 2024.