Enforcement Directorate Moves Supreme Court

NEW DELHI — The Enforcement Directorate (ED) has formally approached the Supreme Court to challenge a Delhi High Court order that previously quashed a money laundering case against news portal NewsClick and its editor-in-chief, Prabir Purkayastha. The case revolves around allegations of foreign direct investment (FDI) violations and financial irregularities.

In its petition before the apex court, the federal anti-money laundering agency contended that the High Court erred by setting aside its Enforcement Case Information Report (ECIR) without properly examining the core provisions of the Prevention of Money Laundering Act (PMLA). The agency also pointed to what it termed an inordinate delay in the pronouncement of the High Court's judgment. The matter is currently awaiting a formal listing for a hearing.

Background of the Legal Dispute

The legal battle stems from a judgment delivered by Justice Neena Bansal Krishna of the Delhi High Court, which had ruled that the continuation of an FIR registered by the Delhi Police's Economic Offences Wing (EOW) amounted to a gross abuse of the process of law. The High Court held that once the underlying predicate offence FIR was quashed, the consequential ED money laundering case could not legally be sustained.

The initial 2020 EOW FIR alleged that PPK Newsclick Studio Pvt Ltd—the parent company of NewsClick—had received FDI amounting to ₹9.59 crore from Worldwide Media Holdings LLC, USA, during the 2018-19 financial year. Investigators had previously claimed this investment violated foreign investment regulations through share overvaluation and that a significant portion of the funds was allegedly diverted for unauthorized expenses.

High Court's Earlier Observations

In its ruling, the High Court observed that the financial transaction in question constituted a standard economic decision that failed to establish any criminal offense. The court noted that clarifications from the Union Ministry of Information and Broadcasting indicated there were no active caps or restrictions on receiving FDI in digital media during the relevant period.

Furthermore, the bench emphasized that standard operational expenses incurred by a digital media organization—such as salaries, consultation fees, and rent—could not automatically be classified as siphoning of funds. The court also rejected the ED's reliance on conspiracy charges under the Indian Penal Code, noting that a year and a half of extensive investigations had failed to yield any incriminating evidence supporting the allegations under Section 4 of the PMLA.

With the ED now appealing the verdict, the legal scrutiny surrounding the digital news portal shifts to the Supreme Court for a definitive judicial review.