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A Fishing Expedition Halted: Quashes Case Against
In a significant ruling for press freedom and criminal jurisprudence, the has quashed both the First Information Report (FIR) registered by the (EOW) and the subsequent money laundering probe initiated by the (ED) against digital media outlet
and its founder, Prabir Purkayastha. Justice Neena Bansal Krishna delivered the judgment on
, severely criticizing the investigative approach as a
"
."
The Genesis of the Dispute The legal troubles for began in following a complaint regarding Foreign Direct Investment (FDI) received by the portal. The EOW alleged that the investment of ₹9.59 crore from the US-based in was secured through overvalued share transactions to bypass FDI caps. The agency further suggested that these funds were diverted for "ulterior motives." Based on this, the ED registered an Enforcement Case Information Report (ECIR) under the (PMLA).
Arguments: A Clash of Compliance and Conspiracy The petitioners, represented by senior counsel, argued that had acted with full transparency, adhering to all (FEMA) guidelines. They produced correspondence from the confirming that no FDI caps existed for digital news portals at the time of the transaction. Furthermore, the petitioner argued that share pricing was a commercial decision determined by independent valuers using the Discounted Cash Flow method, thus nullifying claims of "."
Conversely, the state’s investigative agencies contended that the investment was a "" meant to camouflage the transfer of foreign funds. They maintained that the investigation was at a "crucial stage" and that the portal’s financial losses, coupled with high consultancy and salary expenses, were evidence of money laundering.
Legal Analysis: The Requirement of a Substratum The High Court’s reasoning hinged on the absence of a "." Relying on the principles settled in , the Court underscored that money laundering proceedings cannot exist in a vacuum. If the underlying criminal complaint (the FIR) is meritless and quashed, the consequential PMLA proceedings must collapse.
The Court held that the prosecution failed to establish the essential ingredients for cheating () or criminal breach of trust (). Crucially, the Court noted that not a single entity—including the foreign investor—had claimed to be aggrieved, rendering the FIR a "" rather than a legitimate criminal investigation.
Key Observations The judgment leaves little ambiguity regarding the Court's view of the investigation:
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"Not only are the present proceedings only , but also an arbitrary attack and abuse of powers on the free and impartial journalism of the petitioners."
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"The manner in which the investigations have been conducted clearly show that the same is a in the financial affairs of the Petitioners without the existence of any offence."
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"Pertinently, extensive investigations have been carried out by ED for about a year and a half... but nothing incriminating till date has been found."
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"The allegation of is, therefore, not tenable."
The Verdict and Its Implications
The ’s final order is unequivocal:
"The FIR No. 0116/
and the ECIR bearing ECIR/14/HIU/
are hereby, quashed."
By prioritizing the lack of evidence over the agencies' claims of a "crucial investigation stage," the court has sent a strong message against the weaponization of economic laws to target independent media. The practical effect is the total closure of the cases, providing immediate relief to the portal’s staff and management who have been under intense scrutiny for nearly two years. This ruling serves as a vital precedent, reinforcing that government investigative agencies must demonstrate tangible evidence of a crime—not just suspicions—before invoking the heavy machinery of the PMLA.
