Delhi High Court Quashes FIR, ED Case Against NewsClick, Editor Prabir Purkayastha

The Delhi High Court has set aside a criminal case and an Enforcement Directorate (ED) investigation against digital news platform NewsClick and its editor-in-chief, Prabir Purkayastha, ruling that the proceedings amounted to an abuse of legal process.

In a judgment dated May 29, Justice Neena Bansal Krishna quashed a First Information Report (FIR) registered by the Delhi Police’s Economic Offences Wing (EOW) in 2020 and the related money laundering case pursued by the ED.

The court held that the proceedings were initiated in bad faith and represented “an arbitrary attack” on the petitioners’ journalistic activities. Continuing the case would amount to a “gross abuse of the process of law”, the judge said.

The EOW had alleged that NewsClick received Rs 9.5 crore in foreign investment from U.S.-based Worldwide Media Holdings LLC through an allegedly inflated share transaction designed to bypass foreign direct investment (FDI) rules. Investigators also claimed that part of the funds was diverted through salaries, consultancy payments and other expenditures.

However, the High Court found no evidence that the investment violated regulations in force at the time.

The court noted that NewsClick had sought clarification from the Ministry of Information and Broadcasting in December 2017 regarding FDI rules applicable to online news platforms. In response, the ministry stated in January 2018 that online news publication through web portals did not fall within the category of print media under existing policy.

Based on that clarification, the court concluded that there was no cap on foreign investment in online news publishing when the transaction was executed in March 2018 and that the investment agreement did not disclose any criminal offence.

The judgment also found that the valuation of NewsClick’s shares complied with provisions under the Foreign Exchange Management Act (FEMA). The agreed share price, the court said, was a commercial decision between the investor and the company and did not constitute a criminal act.

Justice Krishna further ruled that allegations of criminal breach of trust were unsustainable because there was no evidence of entrusted property being misappropriated.

Purkayastha had received interim protection from arrest in the matter in June 2021, which was subsequently extended by the court.

The ED conducted searches at NewsClick’s office and the residences of its editors in February 2021 as part of its investigation.

Separately, NewsClick came under scrutiny in October 2023 when Delhi Police carried out raids at the news outlet’s office and the homes of dozens of journalists and associates. Purkayastha was arrested the same day in connection with a separate case under the Unlawful Activities (Prevention) Act (UAPA).

That case alleged that NewsClick had received funds through entities linked to China with the objective of undermining India’s sovereignty and territorial integrity.

In May 2024, the Supreme Court declared Purkayastha’s arrest in the UAPA case illegal and ordered his release.