Don't take coercive action against Newsclick founder in PMLA case: HC to ED

The Delhi High Court on Monday directed the Enforcement Directorate (ED) not to take coercive action against news portal Newsclick and its editor-in-chief in connection with a money laundering case.

The high court issued notice to the ED on the portal's plea seeking a copy of the Enforcement Case Information Report (ECIR) lodged by it in the case.

Justice Jasmeet Singh, who started hearing the vacation bench matters at 10:30 am first in division bench and thereafter in single bench, conducted the court till 11:30 pm, in a rare occurrence.

The court said till July 5, no coercive action be taken against Newsclick and its founder and editor-in-chief Prabir Purkayastha.

It is directed that till the next date of hearing, no coercive action be taken against the petitioners, the judge said and listed the case relating to ED for further hearing on July 5.

Besides, the company also sought quashing of the FIR lodged by Delhi Police on the allegations of foreign funding on the ground that it does not disclose any cognisable offences as alleged.

The allegations in the FIR are that the petitioner company PPK Newsclick Studio Pvt Ltd received Foreign Direct Investment (FDI) to the tune of Rs 9.59 crores from one M/s Worldwide Media Holdings LLC USA during the financial year 2018-19.

It was alleged that the investment was made by greatly overvaluing the shares of the petitioner company to avoid the alleged cap of 26 per cent of FDI in a digital news website.

It was further alleged that over 45 per cent of this investment was diverted/siphoned off for the payment of salary/consultancy, rent and other expenses, which payments are alleged to have been made for ulterior motives.

Therefore, it is alleged that the company has violated the FDI and other laws of the country and has caused a loss to the government exchequer.

The ED has taken cognisance of a Delhi Police FIR to initiate a money laundering probe in this instance and conducted searches on the premises of a digital news platform and several other places in connection with the money received from overseas.

Senior advocate Dayan Krishnan and lawyer Arshdeep Singh, representing the news portal and the founder, submitted that in April, several searches and seizures were carried out and they were informed that ECIR was registered by ED under the Prevention of Money Laundering Act (PMLA).

He said the ED has been continuing the probe for four months and officers of the company are have joined the investigation from time to time.

Advocate Amit Mahajan, representing the ED, submitted that the petitioner was seeking to circumvent the provisions of section 438 of CrPC and the only remedy was to file an anticipatory bail in case the founder was apprehending arrest.

The court also granted time to Delhi Police counsel Avi Singh to file reply to the petition seeking quashing of the FIR and listed the case for July 29.