New Delhi: It’s been almost six years that news portal NewsClick and its Founder Editor Prabir Purkayastha became the epicentre of one of the most intense investigations of a media organisation in India’s recent past.
What began in 2020 as a letter alleging illegal foreign funding and financial irregularities soon turned into three probes, raids and arrests by the Delhi Police’s Economic Offences Wing (EOW), the Enforcement Directorate (ED), and later, the Special Cell under the stringent Unlawful Activities (Prevention) Act (UAPA). The accusations in the case ranged from financial misconduct to national security violations.
In a major setback for the investigating agencies, the Delhi High Court last month quashed the First Information Report (FIR) registered by the EOW and the money-laundering case pursued by the ED.
That leaves the Delhi Police Special Cell’s action against NewsClick and Purkayastha under the UAPA, beginning August 2023.
On 5 August 2023 the New York Times published a report headlined ‘A Global Web of Chinese Propaganda Leads to a U.S. Tech Mogul’, investigating whether Chinese funds were being funneled to media and advocacy organisations across the world to defend Beijing’s authoritarianism. One of the countries included was India, with a fleeting reference to NewsClick. The article mentioned that the media house “sprinkled its coverage with Chinese government talking points”. Twelve days later, the Delhi Police’s Special Cell had filed an FIR, following which several media television channels referred to the NYT report while covering the UAPA case against Purkayastha and NewsClick human resources head Amit Chakraborty.
October saw social media platform X deluged by posts claiming that the Special Cell of the Delhi Police had raided the residences of several journalists associated with NewsClick. “Raid at my residence”, “mobiles and laptops seized”, and “last post from my phone. Mobile seized by Delhi Police”, were some of the posts that flooded social media on 3 October. The raids covered 30 locations, including the NewsClick office in south Delhi and residences of journalists and staffers associated with the company across the Delhi-NCR region.
EOW’s 2020 start
NewsClick, a digital media organisation, was launched by Purkayastha in 2009. Its legal battles began on 26 June 2020, when the Delhi Police’s EOW first filed an FIR under several sections of the Indian Penal Code (IPC) related to criminal breach of trust, cheating, and dishonestly inducing someone to deliver property or alter a valuable security, and criminal conspiracy.
It all started with one Sobhan Singh—an informant, not an aggrieved party—writing on 26 June 2020 to the Information and Broadcasting Ministry, saying that PPK NewsClick Studios Pvt. Ltd was “misappropriating funds resulting in a loss to government exchequer”, and that it has violated policy on Foreign Direct Investment (FDI). The letter was then forwarded by Vijay Kaushik, Under Secretary, Ministry of Information and Broadcasting.
The complainant alleged that between financial years 2017-19, the company has made huge losses, from Rs 17.8 lakh to Rs 6.61 crore. Singh claimed that the losses were due to excessive payments to consultants, salaries and rent. He said that more than 45 per cent of FDI was diverted or siphoned off for the payment of salaries, consultation fees, rent and other such expenses of the promoters, journalists, and employees associated with the company.
“Prima facie these facts suggest that the FDI was actually intended to make the payments for ulterior motives, clandestinely,” the complaint outlined. It also claimed that Purkayastha, along with other associates, had been running a Non-Governmental Organisation in the name of ‘NewsClick India Trust’, which was converted it into PPK NewsClick Studio LLP to “bring foreign funds into the country”.
The main allegation was that the company received unexplained export remittances of Rs 28.46 crore from four foreign entities in alleged violation of the Foreign Contribution (Regulation) Act (FCRA), 2010. It was also alleged that Worldwide Media Holding LLC, USA, funded Rs 9.59 crore through FDI into PPK NewsClick in contravention of provisions of the FCRA.
The FIR, based on the letter by Singh, alleged that FCRA provisions— prohibiting acceptance of foreign contribution by companies engaged in production and broadcast of audio-visual news or current affairs programmes through any electronic mode and by any correspondent or columnist or writer or owner of such company—had been violated.
Status report glitch
Even as the EOW was telling the court that Purkayastha’s NewsClick had violated the Foreign Exchange Management Act (FEMA) by receiving wrongful FDI, a status report dated 26 July 2021, signed by Assistant Commissioner of Police Anil Kumar from the EOW, included a Reserve Bank of India response that the “foreign inward remittance was under automatic route”, and that there was no FEMA violation.
The State on 29 July 2021 disassociated itself from the first status report, seeking to retract it and file a fresh one, despite having supplied the first one to the petitioners. The second status report was submitted three months later, on 4 October 2021, with the RBI response completely removed.
The EOW now alleged that NewsClick was a loss-making entity and had received FDI at inflated valuations. It further alleged that Purkayastha has overvalued shares to avoid the restriction or cap in FDI, and that 45 per cent of the FDI had been siphoned off.
ED joins battle
Three months after the EOW’s move against Purkayastha, the organisation received a second blow when he was booked under the Prevention of Money-Laundering Act (PMLA) by the ED. The second FIR invoked Sections 3 and 4 of the PMLA, but the allegations remained the same as those the EOW had made.
Subsequently on 12 February 2021, NewsClick’s office in south Delhi’s Saket was the focus of a 36-hour ED raid; the one at Purkayastha’s residence lasted more than 72 hours. The ED had taken cognisance of the EOW’s FIR and filed an Enforcement Case Information Report (ECIR), alleging that Purkayastha had misused and siphoned off funds received from foreign companies in violation of RBI rules.
From the case first being filed in 2020 to 2025, Delhi High Court Judge Neena Bansal noted that the “investigation had neither concluded nor was any chargesheet filed”.
EOW, ED cases collapse
Purkayastha’s counsel had informed the court that while NewsClick received FDI on 4 April 2018, there was no cap of 26 per cent in digital media. The cap was only notified through a press note dated 18 September 2019.
He informed the court that as per FEMA guidelines, chartered accountants had allotted a value of Rs 9,188 per share as selling it from Rs 10 would have been a violation of FEMA guidelines. FEMA says that Indian entities cannot transfer shares to foreign investors at a price lower than the fair value arrived at by globally accepted pricing methods. “In a day-to-day market, unless and until a rate is fixed by any government authority or unless there is any restriction on the amount of share premium under any law, the price of the shares is decided on the basis of mutual understanding of the parties,” Purkayastha’s counsel told the court.
The State alleged that the transaction between NewsClick and World Media Holdings LLC was a “fraudulent transaction” as the latter did not exist, but Purkayastha’s counsel said it was not, as the company had begun to exist only from 29 November 2017 after a company with the same had been ‘voided’ on 1 June 1, 2017. As per the state laws of the US state of Delaware, if a company is voided, another person can seek to incorporate a new one in the same name.
Taking cognisance of this, Judge Bansal observed that there were no violations of the FEMA guidelines, and “nothing has come out in the investigation of the State that the M/s Worldwide Media Holdings LLC with the petitioner had the dealings was a non-existing Company”.
“In fact, the Status Report is completely silent on this aspect,” she said.
Taking cognisance of the allegations of “cheating”, the court observed that owing to no complaint by any aggrieved party, and on Shoban Singh not being an aggrieved person but an “informant”, the allegation too was “not established”.
Further, Judge Bansal also noted that since there was “by no stretch of interpretation can it be said to be an entrustment by M/s Worldwide Media Holdings LLC or misappropriation by the Petitioner”. The court observed that there was no offence under Sections 406 or 420 of the IPC. She added that despite the ED’s claims that there is a “clear cut existence of a scheduled offence, it is totally misconceived and baseless”.
“Two years have passed since the registration of impugned ECIR in 2022. The petitioner and various employees of the petitioner have joined the investigations on numerous occasions in 2021, after which they have not been summoned between September 2021 and June 2022. The manner in which the investigations have been conducted clearly show that the same is a fishing and roving exercise in the financial affairs of the petitioners without the existence of any offence,” the court observed.
Taking cognisance of the allegations and the findings of the investigators, the court observed that continuation of such an FIR was “nothing but a gross abuse of the process of law and is hereby quashed”. “It has been held that if the FIR under the predicate offence is quashed, the ECIR automatically, is liable to be quashed, Consequently, the complete ECIR is also quashed,” the court said.
ED sources told The Print that they would challenge the Delhi High Court order to quash the FIR, but sources in the EOW did not comment.
The last remaining FIR
Following an FIR against NewsClick under sections of the UAPA and the IPC on 17 August 2023, the Delhi Police’s Special Cell (New Delhi Range) conducted over 30 raids across the Delhi-NCR region in October the same year. These raids were conducted at NewsClick’s Saket office, Purkayastha’s house and several other properties owned and rented by journalists and columnists associated with the organisation.
The Delhi Police’s Special Cell arrested Purkayastha and NewsClick head of human resources Amit Chakravarty on 3 October 2023 at 5.45 pm, as per the arrest memo. The duo were booked under stringent anti-terror law UAPA.
The police had 24 hours to seek remand but rushed to present Purkayastha at the remand judge’s residence at 6 am; he was ordered into police custody till 10 October. As per court documents accessed by ThePrint, Purkayastha’s counsel was informed about him being produced before a remand judge only an hour later—at 7:07 am by a WhatsApp message.
The counsel further alleged that while Purkayastha was arrested on 3 October, he was presented before a remand judge without informing his counsel, and that not until late evening of 5 October was a copy of the FIR furnished, thus violating Article 22 (1) that says that it is an arrested person’s fundamental tight to be informed of “ground of arrest”.
Taking cognisance of the allegations, the Supreme Court observed that the Investigating Officer had violated Article 22 as he did not give the “grounds of arrest” in writing, adding that “reasons for arrest” on an arrest memo do not suffice as it does not elaborate the grounds and or allow the arrested to mount a defence.
According to the Special Cell FIR, Neville Roy Singham, a foreign national, was found to be discussing how to create a map of India without Kashmir and to show Arunachal Pradesh as a disputed area and that funds were “misused” in connection with the farmers’ protest of 2020-21 to destabilise the country.
Naming Purkayastha, Singham, and activist Gautam Navlakha in this connection, the FIR claimed that funds were infused into NewsClick and further distributed to Abhisar Sharma, Paranjoy Guha Thakurta, Trina Shankar, Urmilesh and Aratrika Halder, among others.
The FIR against NewsClick was filed under Sections 13 (unlawful activities), 16 (terrorist act), 17 (raising funds for terrorist acts), 18 (conspiracy) and 22 (C) (offences by companies) of the UAPA, as well as Sections 153 A (promoting enmity between different groups on grounds of religion, race, place of birth, residence, language, etc., and doing acts prejudicial to maintenance of harmony) and 120B (criminal conspiracy) of the IPC.
On taking cognisance of the submissions of the State and the counsel of Purkayastha, the court noted that while a chargesheet was filed, no seizures of maps showing India without Kashmir and Arunachal Pradesh were put on record.
The 76-year-old editor and founder of NewsClick was subsequently released on the grounds of not being provided a “communication of the grounds of arrest in written”, thus vitiating the arrest and subsequent remand. Purkayastha was released after being in custody for seven months.
Speaking to ThePrint, a senior Delhi Police Special Cell officer said that while the EOW case and ED’s case have been quashed by the Delhi High court, the UAPA case is an independent case, whose findings have been submitted already. “There have been no new findings or developments. We await the next hearing date,” he said.
Aftermath
With two out of three cases quashed, Purkayastha maintains that the Delhi High Court decision to quash the FIR registered against him and NewsClick has vindicated his long-held position that the case was an “attack on press freedom”.
“The judgement is a vindication of what we had held all along: that we had done everything as prescribed by the law and procedures laid down by the agencies concerned,” he told ThePrint. Clearly saddened by the impact the UAPA-related raid had on young journalists associated with the digital organization, Purkayastha said: “The status of the UAPA case is obviously independent of the ED case/cases. The bulk of the people in NewsClick were affected by the UAPA raid.”
“The young reporters who had joined a news organisation had not anticipated that journalism could lead to their being raided, their devices seized, and interrogated under UAPA, which is a draconian Act. I think all of us should remember that many of them were young people, just starting their careers. I hope that this judgment will help them in some way, though time lost cannot be recovered,” he told ThePrint.
ThePrint reached out to lawyers who were part of the State counsel’s team in the case but no response was forthcoming. The State counsel was unavailable for comment, and a lawyer from his team in the case ThePrint spoke to refrained from making any.
Meanwhile, calling the cases against Purkayastha and NewsClick a “politically motivated probe”, senior advocate Kapil Sibal said that there was never any heft in the claims of the ED and EOW. “The cases never had any heft. It was a politically motivated persecution to silence dissent and those with liberal ideas. The BJP has been doing it against journalists, opposition leaders and social workers,” Sibal told ThePrint.
(Edited by Nardeep Singh Dahiya)
Also Read: Kerala HC clarifies ED’s powers, says money laundering probe and summons possible even without FIR