New Delhi: The Enforcement Directorate (ED) has approached the Supreme Court challenging the Delhi High Court’s order quashing the case against PPK NewsClick Studio and its subsequent money-laundering probe against the company and its promoter, Prabir Purkayastha. The high court had on 29 May quashed the Delhi Police’s cases against Purkayastha, Editor-in-Chief of NewsClick and Managing Director of the company that runs the news portal.
A bench of Justice Neena Bansal Krishna had held that allowing the Delhi Police’s Economic Offences Wing (EOW) to proceed with its FIR would amount to a gross abuse of the law. It also quashed the money-laundering probe, describing its allegations as “baseless”.
In its Special Leave Petition (SLP), the ED has flagged what it called inconsistencies in the high court’s order, alleging that it overlooked key facts and material gathered during the investigation.
The EOW had booked the company and Purkayastha in August 2020 under IPC Sections 406 (criminal breach of trust), 420 (cheating) and 120-B (criminal conspiracy), following a complaint alleging that the company had received foreign direct investment (FDI) of Rs 9.59 crore at grossly inflated valuations in April 2018.
Based on the EOW’s FIR, the ED had registered an Enforcement Case Information Report (ECIR) on 2 September 2020 to investigate alleged money laundering. It subsequently conducted searches and scrutinised documents related to NewsClick.
One of the key grounds raised by the ED in its SLP is that the high court overlooked the fact that its applications seeking clarification and vacation of an order barring coercive action against the accused had remained pending for nearly three years. The agency argued that this prevented it from completing its investigation, making the high court’s observation that no incriminating material had been found during the probe erroneous.
“The Hon’ble High Court at Para 126 of the impugned judgement, with respect to the ED’s case has held that despite investigation being carried out for a year and a half no incriminating material has been found,” the agency submitted. “The said finding is erroneous for the reasons that (i) the test of quashing at the stage of investigation is only to see the allegations and not whether any incriminating material is found and (ii) since as far back as 21.06.2021 the Hon’ble High Court had granted an order of no coercive action to be taken against the respondents and the ED’s multiple applications seeking clarifications and vacation of stay was kept pending for around 3 years. Hence, there was always an embargo on the ED to have fully investigate the case.”
In its plea, the agency has reiterated its position that an ECIR is merely an administrative record and cannot be quashed.
It further argued that the high court erred in examining the defence put forth by Purkayastha at the stage of quashing the FIR. Citing the Supreme Court’s 1992 judgment in State of Haryana vs Bhajan Lal, the ED said courts must assess the uncontroverted allegations in an FIR at the time of quashing rather than examine their veracity.
“The Hon’ble Court is not expected to conduct a mini-trial or evaluate the truthfulness of the allegations at this preliminary stage. Therefore, the impugned order passed by the Hon’ble High Court is liable to be set aside,” the agency argued.
The ED also questioned the time taken by the high court to deliver its judgment after reserving the order on 3 December 2025. The judgment was pronounced on 29 May this year.
“That, from a reading of the judgment, it appears that due to the lapse of such period in pronouncing the judgment, several critical contentions raised by the prosecution were overlooked or left unaddressed by the Hon’ble High Court,” the agency submitted.
(Edited by Chingkheinganbi Mayengbam)