ED approaches Supreme Court against Delhi High Court relief to NewsClick

The Enforcement Directorate has approached the Supreme Court to challenge a Delhi High Court judgment that quashed criminal proceedings and a money laundering investigation against news portal NewsClick and its editor-in-chief, Prabir Purkayastha.

In its special leave petition, the federal anti-money laundering agency asserted its strict adherence to statutory procedures, contending that the High Court exceeded its jurisdiction by conducting what amounted to a preliminary "mini-trial".

Background of the foreign investment case

The dispute stems from a 2020 First Information Report registered by the Economic Offences Wing of the Delhi Police against PPK Newsclick Studio Private Limited. The initial investigation alleged that the outlet received foreign direct investment worth Rs 9.59 crore, equivalent to approximately $1.5 million, from US-based Worldwide Media Holdings LLC during the 2018–19 financial year.

Investigators claimed that the shares were issued at an inflated valuation to circumvent foreign investment limits applicable to digital media, and that over 45 per cent of the incoming capital was diverted toward operational expenses such as salaries, consultancy fees, and rent under suspicious circumstances.

Following the police FIR, which invoked provisions of cheating, criminal breach of trust, and criminal conspiracy under the Indian Penal Code, the Enforcement Directorate registered an Enforcement Case Information Report under the Prevention of Money Laundering Act.

High Court ruling quashing the proceedings

On 29 May 2026, the Delhi High Court set aside both the police FIR and the Enforcement Directorate's money laundering case, observing that continuing the proceedings amounted to an abuse of legal process. Justice Neena Bansal Krishna ruled that the foreign investment was a standard economic decision that did not disclose any criminal offence.

The High Court noted that the investor had not submitted any complaint alleging deception, and that operational spending on salaries and rent could not be characterized as siphoning off funds. The court added that extensive investigation over eighteen months had yielded no incriminating evidence of money laundering.

Arguments presented before the Supreme Court

In its appeal before the top court, the Enforcement Directorate argued that High Courts should not evaluate disputed factual questions or assess defence material while considering petitions to quash proceedings at an early stage.

The agency maintained that the legal definition of cheating covers deceptive acts that induce action resulting in potential harm to public interest or statutory compliance. It relied on the Supreme Court's benchmark judgment in Vijay Madanlal Choudhary v. Union of India, which established the legal principles governing money laundering investigations and the procedural status of an ECIR as an internal agency document.

Additionally, the agency raised procedural objections regarding the timing of the High Court judgment. The High Court had reserved its verdict on 3 December 2025 but pronounced it nearly six months later on 29 May 2026. Citing Supreme Court precedent in Ravindra Pratap Shahi v. State of Uttar Pradesh, the Enforcement Directorate argued that such inordinate delays affect judicial outcome.

The matter is currently awaiting listing for a preliminary hearing before a Supreme Court bench.