Delhi High Court quashes FIR, ED probe against NewsClick
text_fields
New Delhi:The Delhi High Court has quashed an FIR and the Enforcement Directorate’s related probe into NewsClick and its founder editor Prabir Purkayastha, ruling that the allegations did not disclose any cognisable offence and constituted an abuse of power.
Delivering judgment on May 29, 2026, Justice Neena Bansal Krishna set aside FIR No. 116/2020 registered by the Economic Offences Wing under Sections 406 (criminal breach of trust), 420 (cheating) and 120B (criminal conspiracy). The court also struck down the Enforcement Case Information Report (ECIR) filed by the ED, which was grounded on the same FIR.
The court criticised the investigations as “not only mala fide” but an “arbitrary attack and abuse of powers on the free and impartial journalism of the petitioners.” The probe, opened in August 2020, had questioned whether NewsClick accepted foreign funds in breach of FDI rules, overvalued shares to sidestep foreign ownership limits in digital media, and diverted funds via salaries and consultancy fees.
The judgment noted NewsClick had sought guidance from the Ministry of Information and Broadcasting in December 2017; the ministry replied in January 2018 that online news portals were not treated as print media and no restrictions then applied. The court observed the 26% cap on foreign investment in digital news media was introduced only in September 2019 — after NewsClick received a USD 1.5 million investment from Worldwide Media Holdings LLC in April 2018 — and held that the March 2018 investment agreement did not violate any law.
On valuation, the court accepted that an independent chartered accountant conducted the share valuation according to FEMA rules and internationally accepted methods, and that the agreed price was a commercial decision rather than a criminal act. It also rejected allegations of siphoning funds through payments to staff and consultants, noting such expenses are normal in digital media businesses and, even if high, do not automatically amount to criminality.
The court further found no evidence of an aggrieved foreign investor; the complainant was merely an informant and not a victim of fraud. Concluding that none of the offences alleged were made out even on their face, the court held that continuing the prosecutions would be “a gross abuse of the process of law.”
Because the ED’s money laundering case was based on the quashed FIR, the ECIR under the Prevention of Money Laundering Act was also set aside.