Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Del) 456

IN THE HIGH COURT OF DELHI AT NEW DELHI
NEENA BANSAL KRISHNA, J.
M/s Ppk Newsclick Studio Pvt. Ltd. - Petitioner
Versus
State Of Nct Of Delhi – Respondent
W.P. (CRL.) NO.1130 of 2021 & CRL.M.A. 9407 of 2021, W.P. (CRL.) NO.1129 of 2021, CRL.M.A. 9397 of 2021, CRL.M.A. 9589 of 2021, CRL.M.A. 18231 of 2022, CRL.M.A. 21591 of 2023, W.P.(CRL) 1146 of 2021, CRL.M.A. 9600 of 2021 & CRL.M.A. 33576 of 2024
Decided On : 29-05-2026

Advocates Appeared:
For the Petitioner:Mr. Kapil Sibal, Sr. Advocate, Mr. Dayan Krishnan, Sr. Advocate, Mr. Sidharth Agarwal, Sr. Advocate with Mr. Arshdeep Singh Khurana, Mr. Harsh Srivastava, Mr. Shreedhar Kale, Mr. Sidak Singh Anand, Ms. Dikksha Ramnani, Ms. Rupali Samuel, Mr. Vishwajeet Bhati, Ms. Showjhanya Shankar and Mr. Manan Khanna, Advocates.
For the Respondent:Mr. Rahul Tyagi, ASC for State with Mr. Sangeet Sibou, Mr. Aniket Kumar Singh and Mr. Priyansh Raj Singh Senger, Advocates, Mr S. V. Raju, ASG with Mr. Zoheb Hossain, Spl Counsel, Mr. Vivek Gurnani, Panel Counsel, Mr. Kanishk Maurya, Mr. Kartik Sabharwal and Mr. Paranjal Tripathi, Advocates

Proceedings under the Prevention of Money Laundering Act cannot exist independently of a valid scheduled offence. If the underlying FIR is quashed for failing to disclose a cognizable offence, the 'substratum' of the money laundering investigation is removed, necessitating the quashing of all related proceedings.

Headnote:(A) Indian Penal Code, 1860 - Sections 406, 420 and 120B - Prevention of Money Laundering Act, 2002 - Sections 3 and 4 - Quashing of criminal proceedings - Lack of disclosure of cognizable offences in FIR - Essential ingredients for cheating and criminal misappropriation not established - Allegations of overvaluation of shares and siphoning are purely commercial in nature and do not prima facie constitute criminal offences. (Paras 67, 81, 83-85, 126)

(B) Money Laundering - Scheduled Offence - Requirement of subsisting scheduled offence - When the underlying FIR is quashed for failing to disclose a cognizable offence, the money laundering investigation cannot survive as it lacks the necessary 'substratum' of a scheduled offence. (Paras 127-130)

Facts of the case:
The petitioner is a corporate entity engaged in digital media. An investigation was initiated following a complaint alleging illegal foreign investment, share overvaluation, and siphoning of funds. FIR was registered under various sections of the penal code, followed by a money laundering investigation. The petitioner sought quashing of the FIR and the related enforcement report, asserting the investment was compliant with regulatory guidelines, transparent, and lacked any criminal intent.

Findings of Court:
The court observed that the allegations regarding foreign investment and share valuation were commercial matters settled through authorized banking channels and expert valuation, failing to disclose any criminal intent or breach of law. The court held that without a valid scheduled offence, the money laundering investigation loses its legal basis.

Issues: 1. Whether the FIR discloses the commission of any cognizable offence under sections 406, 420, and 120B of the Penal Code. 2. Whether the investigation under the anti-money laundering statute can continue if the predicate offence is quashed.

Ratio Decidendi: Criminal proceedings cannot be used to settle commercial disputes, and the essential ingredients of the alleged offences must be present on the face of the FIR to withstand scrutiny. Furthermore, in the absence of a subsisting scheduled offence, any proceedings initiated under the money laundering statute must collapse as there is no 'proceeds of crime' to substantiate the allegations.

Result: Petitions allowed; FIR and associated reporting proceedings quashed.

JUDGMENT :

NEENA BANSAL KRISHNA, J.

The aforesaid three Petitions are interconnected and are decided together.

W.P. (CRL.) NO.1130/2021: For Quashing of FIR No.116/2020 dated 26.08.2020 under Section 406, 420 and 120B IPC P.s. Economic Offences Wing.

1. Writ Petition No.1130/2021 under Article 226 Constitution of India read with Section 482 Cr.P.C. has been filed on behalf of the Petitioner for quashing of FIR No.116/2020 dated 26.08.2020 under Section 406, 420 and 120B IPC P.s. Economic Offences Wing.

2. It is stated in the Petition that the Petitioner, PPK Newsclick is a law- abiding corporate entity, incorporated under the Companies Act, 2013. It owns and operates “newsclick.in,” a well-known independent digital news media Company in India dedicated to covering news from India and elsewhere with a focus on progressive movements. It has become one of India‟s most consistent chroniclers of diverse people‟s movements and struggles across the country. It hosts the work of critical and progressive voices, from across the country. It also focuses extensively on science and technology and data journalism. It engages extensively with the viewers across the world and has several lakhs of followers, views and subscribers on its various social media platforms and its website.

3. In the year 2009 when it was founded, it was controlled by Newsclick India Trust and later from the year 2015, a Limited Liability Partnership namely, M/s PP Newsclick Studio LLP.

4. In or around May, 2017, with an intent to receive investment to allow the LLP to grow and expand, an Agreement dated 01.05.2017 was entered between M/s PP Newsclick Studio LLP and an independent valuer Agency M/s BGJC Associates LLP, to value PP Newsclick Studio LLP. Further, to enable a smooth inflow of any future investment, M/s PP Newsclick Studio LLP was converted into a private limited Company, pursuant to the Board Resolution dated 03.06.2017. The Company thus, came into existence on 11.01.2018.

5. It was further submitted that the valuer M/s BGJC Associates, LLP submitted a Valuation Report dated 28.02.2018 wherein the shares of the Petitioner Company were valued at a price of Rs.9188/- per share having face value of Rs.10/-. A Certificate dated 05.02.2018, certifying the fair value of the equity share of the Petitioner Company, was also issued.

6. The Petitioner approached for FDI and ultimately an entity by the name of M/s Worldwide Media Holdings LLC (WWMH), invested in the shares of the Petitioner as FDI. WWMH was incorporated on 29.11.2017 as a Limited Liability Corporation, in accordance with the laws of Delaware, USA having its registered office at 28, Old Rudnick Lane, Dover, County of Kent, Delaware 19901.

7. It is further stated that as per the record, there existed a Company with a same name of Worldwide Media Holdings LLC, incorporated on 29.05.2014 bearing file No.5542317, having its registered office at 8, The Green, STE A, Dover, Kent, DE-19901 which was voided on 01.06.2017 in the state of Delaware, USA.

8. Under the laws of Delaware, USA, the name of a Company which has been voided, can be used by another person seeking to incorporate a new Company. Therefore, the WWMH with whom the Petitioner had the dealings, was a different Company incorporated on 29.11.2017 and had since then, continued in business. This Company has no connection with the previously cancelled Company, with the same name. Even as per the OA, the investments were made after a gap of more than 1 year, from the date of earlier Company being voided. WWMH is the different Company incorporated on 29.11.2017, though it has the same name of an earlier Company, which got voided.

9. The Petitioner discussed the possibility of investment by WWMH. In order to confirm the regulatory regime in the digital media business and to ensure its compliance, the Petitioner wrote a letter dated 20.12.2017 to Ministry of Information and Broadcasting requesting a clarification to the FDI Policy, in the following terms:

“1. Do

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2026 Supreme(Del) 456

Cases Referred (3)