‘Gross abuse of process of law’: HC quashes Delhi Police, ED cases against NewsClick
The Delhi High Court has quashed cases registered by the Delhi Police and the Enforcement Directorate against news portal NewsClick and its editor-in-chief Prabir Purkayastha
The Delhi High Court has quashed 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 violation of FDI norms. In a judgement dated May 29, Justice Neena Bansal Krishna said 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 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 ₹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% of FDI in a digital news website, and that over 45% 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, Mr. Purkayastha and others. PPK Newsclick Studio sought quashing of the FIR, stating it was replete with vague allegations. In the judgement, the Court stated that the investment was an economic decision, which “did not spell out any criminal offence”, and as per 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 the 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 IPC, stating that the investigating agency must show the "illegal objective" or "means" adopted by NewsClick and others for the offence. "Pertinently, extensive investigations have been carried out by ED for about a year and a half and Petitioners as well as its employees have been summoned and examined many a times, but nothing incriminating till date has been found or placed on record.
The BriefWire