The Delhi High Court has quashed an FIR registered by the Delhi Police's Economic Offences Wing (EOW) and the Enforcement Directorate (ED) case against news portal NewsClick and its editor-in-chief Prabir Purkayastha. The case pertained to alleged violations of foreign direct investment (FDI) norms.
Judgment Details
In a judgment dated May 29, Justice Neena Bansal Krishna ruled that continuing the FIR by the EOW was a gross abuse of the legal process. Once the FIR under the predicate offence was quashed, the ED's Enforcement Case Information Report (ECIR) in the matter was also liable to be closed.
Background of the Case
The EOW's 2020 FIR alleged that PPK Newsclick Studio Pvt Ltd, NewsClick's parent company, received FDI of Rs 9.59 crore from Worldwide Media Holdings LLC USA during the financial year 2018-19, violating foreign investment law. It claimed the investment overvalued shares to bypass the 26% FDI cap for digital news websites, and that over 45% of the investment was siphoned off as salary, consultation fees, rent, etc., for ulterior motives. The ED subsequently registered a money laundering case against NewsClick, Purkayastha, and others. PPK Newsclick Studio sought quashing of the FIR, calling it vague.
Court's Observations
The court stated that the investment was an economic decision and did not constitute a criminal offence. It noted that the Union Ministry of Information and Broadcasting had informed NewsClick that there was no cap on FDI in digital media at the relevant time. The court held that the investment followed acceptable practices, and allegations of cheating or criminal breach of trust were not established even if all claims were admitted.
For the offence of cheating, the court emphasized that there must be a cheated person, which would be Worldwide Media Holdings LLC in this case. However, no complaint was filed by that entity; instead, the complaint came from an informant. The court also rejected the allegation of siphoning, noting that a digital media company would naturally incur expenses on salaries, consultation fees, rent, etc.
Rejection of Conspiracy Claim
The court dismissed the ED's attempt to sustain the money laundering case based on criminal conspiracy under the IPC, stating that the investigating agency must demonstrate an illegal objective or means adopted by NewsClick.
Reactions
NewsClick stated that the judgment vindicates its position, emphasizing that numerous cases against it were attacks on press freedom. The outlet maintained that its only fault was practicing journalism covering people's movements. The court's strong stance supports independent journalism in India.
