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Written by: Alisha Das (Intern)
Edited by: Anubhav Yadav (Content Head & Developer)

Last year, in August, the Delhi Policeโ€™s Economic Offence Wing (EOW) registered an FIR against PPK Newsclick Studio Private Limited which owns the digital news platform, NewsClick, and its founder, Prabir Purkayastha under Sections 406, 420, and 120-B of the IPC. According to the FIR, during the financial year 2018-19, the petitioner company PPK Newsclick Studio Pvt Ltd received Foreign Direct Investment (FDI) of Rs 9.59 crores from M/s Worldwide Media Holdings LLC USA. The investment was allegedly done by drastically overvaluing the petitioner company’s shares to bypass the purported FDI cap of 26% in a digital news website. Over 45 percent of this investment was allegedly diverted off for the payment of salary/consultancy, rent, and other expenditures, all of which payments were allegedly done for ulterior motives.

In February 2021, the Enforcement Directorate took notice of the FIR and registered an Enforcement Case Information Report (ECIR) against the petitioner under Section 3 & 4 of the Prevention of Money Laundering Act, 2002. The ED raided the house of Prabir Purkayastha for over 80 hours and the Newsclick office for over 36 hours. The investigation has been continuing for over 4 months now.

NewsClick sought the quashing of the FIR lodged by the Delhi Police on allegations of foreign funding on the ground that it did not disclose any cognizable offences as alleged. Senior advocate Dayan Krishnan and lawyer Arshdeep Singh, arguing for the petitioners (both News Click and Mr. Purkayastha) told the court that when there was no cap on Foreign Direct Investment (FDI) in digital media in April 2018, Worldwide Media Holdings LLC invested money in NewsClick.

He also contended that they received the copy of EOWโ€™s FIR only on June 5 after approaching the Chief Metropolitan Magistrate. Senior advocate Kapil Sibal was also representing the petitioners and argued that despite several requests, they have not received a copy of the ECIR, which is a violation of their right under Article 21 of the Indian Constitution. Advocate Mahajan, arguing for the ED, claimed that there is no concept of an ECIR under the PMLA, 2002. He also argued that the petitioner was attempting to avoid the rules of section 438 of the CrPC and that the sole option was to file an anticipatory bail if the founder was about to be arrested.

Meanwhile, Justice Subramonium Prasad of the Delhi High Court recused himself from hearing the petition seeking the quashing of an FIR lodged against him in a money laundering case.

On 21 June 2021, a Single Bench of Justice Jasmeet Singh provided interim protection till July 5 directing the ED to not take any coercive action against them. The court also gave Delhi Police counsel, Avi Singh, time to file a response to the petition seeking to have the FIR quashed, and set the matter for July 29.

On July 5, the interim protection was extended by Justice Mukta Gupta of the Delhi High Court, who also sought a response from the Enforcement Directorate regarding Mr. Purkayastha’s request for anticipatory bail in the money laundering case. The court noted that the petitioners had not yet received a copy of the Enforcement Matter Information Report (EMIR) filed by the ED in the case. โ€œSo, when you issue summons, also give the copy of ECIR to himโ€ the judge added.

Case Name: M.S. Ppk Newsclick Studio Pvt. v. Union of India & Anr, 2021

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