New Delhi: The Delhi High Court Wednesday granted anticipatory bail to NewsClick founder and editor-in-chief Prabir Purkayastha, noting that he was 75 years of age, there was no evidence to suggest he had been called to join investigation, and that cases against him had been registered five years ago and even a charge sheet had not been filed.
Bail was granted in two separate matters; one, a case of alleged money laundering being probed by the Enforcement Directorate (ED), and the other of alleged unlawful foreign funding initiated by the Economic Offences Wing of the Delhi Police.
The ED had initiated its probe on the basis of a Delhi Police FIR, with the money laundering case stemming from Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA), 2002.
Section 3 states that involvement in any activity “connected with the proceeds of crime and projecting it as untainted property” can make up the offence of money-laundering, while Section 4 prescribes punishment of three to seven years for money-laundering, along with a fine.
The police FIR alleged that NewsClick Studio Private Limited received foreign direct investment (FDI) of Rs 9.59 crore from Worldwide Media Holdings (WWMH) during fiscal 2018-19, and that the investment was made by overvaluing the shares of the petitioner company. It further alleged that over 45 percent of the investment was diverted or syphoned off, according to media reports.
In February 2021, over the course of four days, the ED conducted raids at the residence and offices of the NewsClick founder and his employees, on the grounds that the digital portal was violating FDI laws.
The same year, NewsClick moved the Delhi High Court seeking a direction to the ED to furnish a copy of the Enforcement Case Information Report (ECIR), while also seeking protection from coercive action against Purkayastha.
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Purkayastha’s defence in court
By way of his petition before the HC, Purkayastha submitted that he is a respectable, law-abiding citizen, having deep roots in society, and residing with his partner.
He told the court that he was a reputable journalist, and also director of NewsClick Studio Private Limited, which owns and operates the digital portal. He said that in 2017, the company transitioned from a limited liability partnership into a private limited company.
Subsequently, the company was approached for FDI. In 2018, WWMH agreed to invest in it and currently holds a 7.69 percent share.
Purkayastha told the court that the investment by WWMH was lawful in terms of FDI norms in digital news media in 2018, and an FIR was registered against him with malafide intent to “cull free speech, harass and intimidate” him.
Saying that there is a “fishing and roving inquiry” aimed at taking coercive steps against him on any ground or basis, Purkayastha argued that the ED had not supplied him with the ECIR, which would allow him to be aware of the exact allegations against him.
On the other hand, the Delhi Police had alleged that the foreign investment was made by greatly undervaluing the shares of the company. It was further alleged that over 45 percent of this investment was diverted or siphoned off for the payment of salaries, rent and other expenses. Essentially, their case was based on the allegation that the company had violated the FDI and other laws of the country and caused a loss to the government exchequer.
What the court said
Saying that personal liberty is a precious constitutional value which cannot be tampered with casually, a bench of Justice Neena Krishna noted: “The objective behind depriving an individual of his personal liberty must be founded on serious considerations.”
ThePrint has accessed a copy of the order.
Pointing to allegations against Purkayastha of misuse and syphoning of funds got from foreign companies, the court said the “cases got registered in 2020 but even in the predicate offence, the investigations have not been concluded nor any chargesheet filed”.
There is also nothing on record to suggest that Purkayastha has been called since 2023 ever to join the investigations, the court said, adding that he is a respectable man, of 75 years, having roots in society.
“The evidence is essentially documentary in nature and there is no likelihood of tampering with the evidence or of influencing the witnesses,” it said while granting him bail.
Predicate offence, or a scheduled offence, is the underlying crime committed to obtain “proceeds of crime”. Under Section 30 of the PMLA, 2002, parts A, B, and C list the predicate offences across various statutes, including the Indian Penal Code, Narcotic Drugs and Psychotropic Substances Act, Explosive Substances Act, Arms Act, Immoral Traffic (Prevention) Act, Wildlife (Protection) Act and even the Copyright Act.
Crucially, to be accused of money laundering under the PMLA, the offence has to be linked to one of the scheduled offences listed under Section 30.
(Edited by Nida Fatima Siddiqui)
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