New Delhi: The Delhi High Court has dismissed an FIR by the Economic Offences Wing against NewsClick and its founder-editor Prabir Purkayastha, ruling that the accusations about foreign investment and financial wrongdoing did not amount to any cognisable offence.
Delivering the judgment on 29 May 2026, Justice Neena Bansal Krishna set aside FIR No. 116/2020, which had been registered under Sections 406 (criminal breach of trust), 420 (cheating), and 120B (criminal conspiracy) of the Indian Penal Code. The court also annulled the Enforcement Directorate’s ECIR that was launched on the basis of that FIR.
The court criticised the investigations, saying the actions were “not only mala fide” and amounted to “an arbitrary attack and abuse of powers on the free and impartial journalism of the petitioners.”
The EOW had lodged the FIR in August 2020. Its probe alleged that NewsClick took foreign funds in breach of FDI rules, inflated share values to get around foreign ownership limits in digital media, and diverted money through salaries, consultancy fees and other payments.
Ministry Guidance Cited
NewsClick had asked the Ministry of Information and Broadcasting in December 2017 whether FDI caps applied to online news outlets. The ministry replied in January 2018 that online news portals were not covered by the definition of print media and that no restrictions applied at that time.
The court noted the 26% cap on foreign investment in digital news was introduced only in September 2019 — after NewsClick received a USD 1.5 million investment from Worldwide Media Holdings LLC in April 2018. “The investment agreement dated 20.03.2018 cannot be said to be in violation of any law or disclosing any criminal offence,” the court said.
On Valuation & Commercial Decisions
The court accepted that the company’s share valuation had been done by an independent chartered accountant following FEMA rules and accepted international methods. It said the final price negotiated between the investor and NewsClick was a commercial decision and did not, by itself, make it a criminal act.
The court also rejected claims that foreign funds were siphoned off through payments to staff, freelancers or consultants. “When a company is functioning especially in the business of digital media, such expenses are bound to occur,” the judgment said, adding that even high spending does not automatically create a criminal offence.
On cheating, the court observed the foreign investor never complained of being misled and noted the complainant was only an informant, not an aggrieved party. “There is nothing which has emerged even during the investigations… that there was any person who was aggrieved or who was cheated by the petitioner,” the court observed.
The bench concluded that even if all allegations were taken at face value, the offences alleged in the FIR were not made out and continuing criminal proceedings would be “a gross abuse of the process of law.”
Because the Enforcement Directorate’s money-laundering case was based on the same FIR, the court also quashed the ECIR registered under the Prevention of Money Laundering Act (PMLA).
