The action of Enforcement Directorate (ED) against independent digital news media company NewsClick and its founder Prabir Purkayastha in relation to a foreign direct investment (FDI) case amounted to an abuse of power against free and impartial journalism, the Delhi High Court recently held while quashing the money laundering case against the news portal.
In a judgment passed on May 29, Justice Neena Bansal Krishna quashed the FIR registered by the Economic Offences Wing (EOW) and the consequential money laundering proceedings initiated by ED.
"Not only are the present proceedings only mala fide, but also an arbitrary attack and abuse of powers on the free and impartial journalism of the petitioners," the Court stated.
The Court further observed that ED's allegation that a scheduled offence exists was "totally misconceived and baseless".
"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. 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."
The Court observed that ED conducted a fishing and roving exercise on the news company.
"The manner in which the investigations have been conducted clearly show that the same is a fishing and roving exercise in the financial affairs of the Petitioners without the existence of any offence."
While quashing the FIR registered by the EOW, the Court stated that the continuation of such FIR was nothing but a gross abuse of the process of law.
The money laundering case stemmed from an investment received in 2018 from a US-based company M/s Worldwide Media Holdings LLC which was allegedly non-existent.
In February 2021, the ED had raided the homes and offices of the NewsClick founder and employees. The raids lasted for more than four days whilst Purkayastha was detained at home.
Among the allegations made against NewsClick were overvaluing of shares, diverting funds and violation of foreign direct investment (FDI) regulations.
Referring to a reply given by Ministry of Information and Broadcasting to NewsClick, the Court observed that in 2018 when the investment was received there was no cap of 26 percent on digital media. It rejected the allegations of overvaluation of shares, finding them baseless.
"It is an economic decision which does not spell out any criminal offence."
The allegation that the FDI was siphoned off towards payment of salary/consultation fee, rent and other expenses is untenable, the Court stated.
Further, the Court observed that the EoW status report was completely silent on the aspect of allegations that US company was non-existent.
"If the FIR does not disclose any offence or the allegations are patently absurd and born out of mala fide, then merely by claiming that investigation is at a crucial stage, it would not be an impediment for the Court to quash the FIR," the Court stated.
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