The Delhi High Court quashed an FIR 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 in relation to alleged violation of FDI norms.
In a judgment dated May 29, Justice Neena Bansal Krishna said the continuation of the FIR registered by the Economic Offences Wing of the Delhi Police was “nothing but a gross abuse of the process of law”. Once the FIR under predicate offence was quashed, the ED’s Enforcement Case Information Report (ECIR) in the matter was also liable to be closed.
The EOW’s 2020 FIR alleged that PPK Newsclick Studio Pvt Ltd, NewsClick’s parent company, received foreign direct investment (FDI) of Rs 9.59 crore from Worldwide Media Holdings LLC USA during the financial year 2018-19 in violation of the foreign investment law, which caused a loss to the government exchequer.
It claimed that the investment was made by greatly overvaluing the shares of the company to avoid the alleged cap of 26 per cent of FDI in a digital news website, and that over 45 per cent of this investment was diverted/siphoned off as salary, consultation fee, 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, stating it was replete with vague allegations.
In the judgment, the court stated that the investment was an economic decision, which “did not spell out any criminal offence”, and as per the reply of the Union Ministry of Information and Broadcasting to a letter by the news outlet, there was no cap/restriction on receipt of the FDI in digital media at the relevant time.
The court held that investment was as per the acceptable practices, and the offences of cheating or criminal breach of trust, even if all allegations were admitted, were not established.
It stated that for the offence of cheating, there has to be a “cheated” person, which should be M/s Worldwide Media Holdings LLC in this case, but there was no such complaint, and instead the complaint was made by “merely an informant”.
The court further noted that a company in the business of digital print media was bound to incur expenses on payment of salary, consultation fee, rent, etc., and the allegation of siphoning was therefore not tenable.
The court also rejected the ED’s attempt to sustain its money laundering case on the basis of the offence of conspiracy under the IPC, stating that the investigating agency must show the “illegal objective” or “means” adopted by NewsClick and others for the offence.
‘Judgment vindicates our position’
Newsclick has always maintained that numerous cases and charges against it are attacks on the freedom of the Press. Newsclick’s only ‘fault’ has been to practice journalism that covers people’s movements. The judgment of the Delhi High Court vindicates our position. It also takes a strong stand in support of independent journalism in India.
