The Enforcement Directorate (ED) has moved the Supreme Court challenging a Delhi High Court judgment that cancelled an FIR against NewsClick and set aside the money-laundering investigation initiated against the digital news portal.
The agency has argued that the High Court exceeded its jurisdiction by examining disputed questions of fact while cancelling criminal proceedings at the preliminary stage.
In its special leave petition, the ED has challenged the May 29, 2026, judgment passed by the Delhi High Court on petitions filed by PPK NewsClick Studio Pvt Ltd and its director, Prabir Purkayastha.
The High Court had cancelled FIR No. 116/2020, registered by the Economic Offences Wing (EOW) of Delhi Police under Sections 406, 420 and 120B of the Indian Penal Code (IPC). It also set aside the Enforcement Case Information Report (ECIR) registered by the ED under the Prevention of Money Laundering Act (PMLA).
The ED has contended that the High Court erred in law by conducting what it described as a "mini-trial" while exercising its powers to cancel criminal proceedings. According to the agency, courts cannot adjudicate disputed questions of fact or assess defence material produced by the accused at this stage.
The petition questions whether the High Court could cancel the proceedings despite the settled legal position cited by the ED that courts should not ordinarily examine an accused's defence or resolve disputed factual issues while deciding a petition to cancel an FIR.
ED CHALLENGES HC'S INTERPRETATION OF CHEATING
The agency has also challenged the High Court's approach to the legal ingredients of cheating. It has argued that the offence can cover situations in which deception intentionally induces a person to act or refrain from acting, causing or potentially causing harm to that person's body, mind, reputation or property.
The ED has further relied on the Supreme Court's judgment in Vijay Madanlal Choudhary v. Union of India, which dealt with the PMLA framework and the status of an ECIR as an internal document of the agency. The petition questions the High Court's decision in light of that precedent.
The agency has also raised concerns over the time taken by the High Court to deliver its judgment. It has pointed out that the court reserved its verdict on December 3, 2025, but pronounced it on May 29, 2026, after a gap of nearly six months.
The ED has cited the Supreme Court's judgment in Ravindra Pratap Shahi v. State of Uttar Pradesh in support of its contention regarding the delayed pronouncement of judgments.
WHY THE DELHI HIGH COURT CANCELLED THE FIR
The Delhi High Court had allowed the petitions filed by PPK NewsClick Studio Pvt Ltd and Prabir Purkayastha, holding that the allegations in the FIR did not disclose the offences of cheating or criminal breach of trust against NewsClick.
The case stemmed from allegations concerning a foreign direct investment of $1.5 million, equivalent to approximately Rs 9.59 crore, that NewsClick received from US-based Worldwide Media Holdings LLC in April 2018 in exchange for a 7.69 per cent stake in the company.
The allegations included claims that NewsClick had issued shares at an inflated valuation to circumvent foreign investment restrictions applicable to digital news media. Investigators also alleged that the company had diverted a substantial portion of the funds towards salaries, consultancy fees, rent and other expenses.
The High Court, however, held that the investment followed a valuation exercise and that the agreed share price represented a commercial decision between the company and the investor.
The court also noted that the government had clarified in January 2018 that online publications did not fall within the ambit of print media.
It observed that allegations of excessive expenditure and the alleged syphoning of funds did not, by themselves, establish a criminal offence. The court further noted that the investor had not complained of being cheated and that the record did not establish the essential ingredients of cheating or criminal breach of trust.
Consequently, the High Court cancelled the FIR, holding that its continuation would amount to an abuse of the process of law. Since the ED's investigation arose from the same underlying FIR, the court also cancelled the money-laundering investigation initiated under the PMLA.
The ED has now challenged that judgment before the Supreme Court, questioning the High Court's approach to disputed facts, the interpretation of cheating, the application of the PMLA framework and the delay in pronouncing the verdict.
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