ED challenges HC order in NewsClick PMLA case

The Enforcement Directorate has decided to challenge in the Supreme Court a Delhi High Court’s order that quashed a money laundering case against news portal NewsClick and its editor-in-chief, Prabir Purkayastha, on charges of violation of FDI rules, officials said on Thursday.

The high court’s May 29 order “overlooked or left unaddressed” several critical contentions raised by the prosecution, they said.

Justice Neena Bansal Krishna, in her 41-page judgment, had said that the continuation of the FIR by the Delhi Police’s Economic Offences Wing against NewsClick and Purkayastha was “nothing but a gross abuse of the process of law” and once the FIR under the predicate offence was quashed, the ED’s case in the matter was also liable to be closed. “Aside from bald assertions of there being a criminal conspiracy, there is not a whisper of any incriminating allegation, which would even remotely suggest the commission of the offence punishable under Section 4 PMLA (Prevention of Money Laundering Act),” the order said.

Meanwhile, reacting to the high court’s order, NewsClick said in a statement on Thursday that it has “always maintained that the numerous cases and charges against it are attacks on the freedom of the press”.

“Newsclick’s only fault has been to practise journalism that covers people’s movements. The Delhi High Court vindicates our position. It also takes a strong stand in support of independent journalism in India,” the statement said.

“We are confident that the various other proceedings against Newsclick will also be resolved, and so reaffirm freedom of the press,” it said.

ED officials said they would file an appeal against the high court’s order before the apex court. The judgment appears to proceed on the basis that there is no deceived victim, they said.

Whereas, officials added, the case of the ED and the EOW was that “false representations” were made to statutory authorities and banks regarding the genuineness of the investor, nature of funds, source of funds, and the commercial nature of the investment and valuation of shares.

The court failed to consider that cheating need not be confined to the private sector, they said, adding that the inducement of public authorities to act upon false representations can constitute cheating where corresponding wrongful gain/wrongful loss is alleged.

ED officials feel that at the quashing stage, the issue before the high court was whether allegations, if accepted as true, disclose an offence. Whereas the judgment is based upon whether the ED had conclusively established the allegations, and whether the allegations were ultimately provable, they said. Officials added that ED investigators had collected emails and recorded statements of various persons, including those working with Purkayastha, to establish that PPK Newsclick Studio Pvt Ltd (the company that owns NewsClick) wanted to get foreign direct investment by “avoiding” government permission. The purpose of PPK Newsclick Studio LLP was changed to digital company and different arrangements were made and investment was received from Worldwide Media Holdings LLC to achieve this, they claimed.

The premises of NewsClick and Purkayastha were raided by the ED in September, 2021. The agency had also attached an Rs 4.52-crore flat located in south Delhi’s Saket area, linked to Purkayastha, apart from fixed deposits worth Rs 41 lakh as part of this investigation.

Vijayan hails Delhi HC verdict in NewsClick case

Leader of Opposition in the Kerala Assembly, Pinarayi Vijayan, on Thursday, said that the recent Delhi High Court verdict in the NewsClick case was a strong blow to the “political misuse of power”. In a post on the social media platform X, Vijayan said that the Delhi High Court verdict was “a major setback for the BJP, which misuses central agencies to suppress political dissent”.

“The action against NewsClick and its editor, Prabir Purkayastha, was an attempt to silence critical journalism and democratic voices. This is a victory for democratic rights and press freedom over the fascist politics of the Sangh Parivar,” he said on X. Vijayan was referring to the Delhi High Court’s decision to quash cases registered by the Delhi Police and the Enforcement Directorate against news portal NewsClick and its editor-in-chief, Prabir Purkayastha, in relation to alleged violations of FDI norms.

The Marxist veteran, in a Facebook post, said that right from the beginning, there were allegations that the action against NewsClick and its editor was a “political hunt” targeting critical journalism and public protests. “The court’s intervention gives considerable validity to those allegations,” he said. Vijayan further said that in an era of media functioning in line with “corporate-political interests”, voices that question authority are the most frequently targeted.

“The same thing happened in the case of NewsClick. This verdict is not just a victory for an institution; it is a victory for democratic rights and freedom of the press.

“The verdict makes it clear that questioning authority is not a crime and that media working on behalf of the people cannot be silenced through the force of law and investigative agencies,” he said. In its May 29 judgment, the High Court said that the continuation of the FIR registered by the Delhi Police’s Economic Offences Wing was “nothing but a gross abuse of the process of law”, and that once the FIR in the predicate offence was quashed, the Enforcement Directorate’s Enforcement Case Information Report 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 foreign investment laws, causing a loss to the government exchequer. The court held that the investment was in accordance with permissible practices and that offences of cheating or criminal breach of trust, even if all allegations were accepted, were not established.