The Enforcement Directorate has moved the Supreme Court against the Delhi High Court order that quashed the money laundering case against online news portal NewsClick and its founder Prabir Purkayastha. The agency filed a special leave petition on October 24, asking the court to set aside the May 29, 2026 verdict, which had shut down both the police FIR and the ED proceedings.
The case, which began with a 2020 FIR over alleged foreign funding violations, has travelled through the courts for six years. Now the final word will rest with the Supreme Court. The matter is yet to be listed for hearing.
What the Delhi High Court had ruled
In its May 29 judgment, a bench of Justice Neena Bansal Krishna held that the essential ingredients of cheating and criminal conspiracy, under Sections 420 and 120-B of the Indian Penal Code, were not made out against NewsClick’s parent company, PPK Newsclick Studio Pvt Ltd. The court described the continuation of the FIR registered by the Delhi Police’s Economic Offences Wing as nothing but a gross abuse of the process of law.
The logic was straightforward. Once the FIR relating to the predicate offence was quashed, the court said, the ED’s Enforcement Case Information Report built on that FIR was also liable to be closed.
Why the ED says the order is wrong
The ED’s appeal attacks the High Court order on several fronts. Its central complaint is that the court failed to deal with the evidence and incriminating material the agency had placed before it, and that the court’s observation that no incriminating material had been found despite a year and a half of investigation was erroneous.
The petition argues that the High Court conducted what lawyers call a mini-trial at the writ stage, weighing disputed facts when the test at that stage is only to see whether the allegations disclose an offence. The agency also contends the court relied heavily on the petitioners’ material while overlooking the ED and police evidence.
Among the material the ED says was ignored are emails and statements which, in its view, point to the funding arrangements having been pre-planned rather than a routine commercial investment.
The delay argument
The ED has also flagged the timeline of the High Court proceedings. The judgment, it says, was reserved on December 3, 2025, but pronounced only on May 29, 2026, a gap of five months and 26 days. Because of that lapse, the agency argues, several critical contentions raised by the prosecution were overlooked or left unaddressed.
The petition further points out that the ED’s hands were tied for much of the case. Since June 21, 2021, the High Court had granted an order of no coercive action against the respondents, and the agency’s applications seeking clarification or vacation of that stay remained pending for around three years.
What the original case was about
The EOW FIR of 2020 alleged that PPK Newsclick Studio received foreign direct investment of about Rs 9.6 crore during 2018-19 from Worldwide Media Holdings LLC of the United States. The agency alleged that shares were issued at an overvalued price of Rs 11,500 each, a device meant to get around the 26 per cent cap on foreign investment in digital news websites at the time.
According to the ED, more than 45 per cent of the investment was diverted as salary, consultancy fees, rent and other payments for ulterior motives. The agency has also linked the funds to US businessman Neville Roy Singham, whom it describes as connected to the Chinese Communist Party, and has alleged the money was meant to secretly channel funds for information and propaganda activities. NewsClick and Purkayastha have denied wrongdoing.
Separate proceedings also exist in the wider case. The Delhi Police Special Cell registered a case under the Unlawful Activities (Prevention) Act, and the CBI registered a case under the Foreign Contribution (Regulation) Act.
Why the Supreme Court hearing matters
The appeal raises a question that goes beyond NewsClick. It asks whether an ED enforcement record can survive once the police FIR it is based on has been quashed, and how far a High Court can go into disputed facts while deciding a quashing petition. The answers will shape how courts review financial crime investigations in future.
FAQs
What has the ED challenged in the Supreme Court?
The Delhi High Court’s May 29, 2026 order quashing the EOW FIR and the ED’s money laundering case against NewsClick and Prabir Purkayastha.
Why did the High Court quash the case?
It held that cheating and criminal conspiracy were not made out, called the FIR a gross abuse of the process of law, and ruled the ED case could not survive once the predicate FIR was quashed.
What is the ED’s main argument?
The High Court ignored its evidence, conducted a mini-trial at the writ stage, and delivered judgment nearly six months after reserving it, leaving key arguments unaddressed.
What was the original allegation?
About Rs 9.6 crore in foreign investment in 2018-19 at an overvalued share price, meant to bypass the FDI cap on digital news, with a large part allegedly diverted to salaries, consultancy fees and rent.
What happens next?
The petition is yet to be listed for hearing. The High Court order remains in force until the top court hears the matter.
The Supreme Court’s answers will echo well beyond this one investigation.
