The Supreme Court on Tuesday issued notice on a special leave petition filed by the Enforcement Directorate challenging the Delhi High Court's judgment quashing the First Information Report registered by the Economic Offences Wing of the Delhi Police and the consequent Enforcement Case Information Report against PPK Newsclick Studios Private Limited and its founder-editor Prabir Purkayastha. A bench comprising Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice V Mohana passed the order.
Bench Unimpressed With ED Petition But Issues Notice
During the hearing, Additional Solicitor General SV Raju, appearing for the Enforcement Directorate, sought an adjournment of four weeks. The law officer submitted that the Delhi Police intended to file a separate challenge against the same impugned High Court order in the interim. Justice Bagchi, addressing the ASG, remarked that the Court was 'not very impressed with the ED SLP'. Despite this observation, the bench proceeded to issue notice to the respondents, requiring them to file their response.
Delhi High Court's Findings on Predicate Offences
The impugned judgment was delivered on May 29 by Justice Neena Bansal Krishna of the Delhi High Court. The High Court quashed the FIR registered in August 2020 under Sections 406 (criminal breach of trust), 420 (cheating) and 120B (criminal conspiracy) of the Indian Penal Code. The case originated from allegations concerning Foreign Direct Investment received by PPK Newsclick Studios Private Limited from US-based Worldwide Media Holdings LLC. The investigating agency alleged the investment structure was designed to circumvent restrictions governing foreign investment in digital news media and that a portion of the funds was diverted towards salaries, consultancy fees, rent and other expenses.
The High Court held that the allegations did not disclose the commission of the offences invoked in the FIR. It found that the material on record did not establish the commission of the alleged scheduled offences. The Court further observed that the allegations concerning the share valuation and expenditure of the company did not, by themselves, establish criminal wrongdoing. Consequently, the High Court concluded that the continuation of the proceedings amounted to a gross abuse of the process of law.
Impact on Money Laundering Proceedings
The Enforcement Directorate had registered the ECIR under the Prevention of Money Laundering Act, treating the offences alleged in the EOW FIR as predicate offences. The High Court held that once the predicate FIR was quashed, the connected money laundering proceedings could not survive independently. The ED's challenge before the Supreme Court seeks to overturn this specific finding and revive the money laundering investigation.
Distinction From UAPA Proceedings
The proceedings quashed by the High Court are separate and distinct from the case registered by the Delhi Police Special Cell under the Unlawful Activities (Prevention) Act against NewsClick and Purkayastha. That case pertains to allegations relating to foreign funding and a purported conspiracy and remains independent of the EOW FIR and the ED proceedings quashed by the High Court.
What Was The High Court's Rationale For Quashing The FIR And ECIR?
The Delhi High Court held that the allegations concerning foreign investment structure, share valuation and company expenditure did not disclose the commission of offences under Sections 406, 420 and 120B IPC. Finding no scheduled offence made out, the Court ruled the predicate FIR was legally unsustainable and its continuation an abuse of process. Consequently, the connected PMLA proceedings, which depended entirely on the predicate FIR, could not survive and were also quashed.
Proceeding | Authority | Statutory Basis | Status After HC Judgment |
|---|---|---|---|
FIR | Delhi Police EOW | IPC Sections 406, 420, 120B | Quashed |
ECIR | Enforcement Directorate | Prevention of Money Laundering Act | Quashed as consequence of FIR quashing |
UAPA Case | Delhi Police Special Cell | Unlawful Activities (Prevention) Act | Unaffected; separate proceedings |
The Supreme Court has now issued notice in the ED's appeal. The matter is listed as Directorate of Enforcement versus M/s PPK Newsclick Studios Pvt. Ltd, Diary No. 63217/2026. The respondents are expected to file their replies before the next date of hearing, while the Delhi Police is anticipated to file a separate challenge against the same High Court order.