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Delhi HC Grants Protection to Newsclick Founder in Foreign Funding Case


Last Updated: July 07, 2021, 23:32 IST

New Delhi

File photo of Delhi High Court.

File photo of Delhi High Court.

Justice Yogesh Khanna issued notices on their pleas seeking anticipatory bail and sought status report from Delhi Police.

The Delhi High Court on Wednesday granted interim protection from arrest to Newsclick's editor-in-chief Prabir Purkayastha and its director Pranjal Pandey in connection with a Delhi Police FIR concerning foreign funding and directed them to join the investigation. Justice Yogesh Khanna issued notices on their pleas seeking anticipatory bail and sought status report from Delhi Police.

Purkayastha, also the founder of the Newsclick and Pandey have filed separate petitions seeking anticipatory bail in the case. In the two identical orders, the judge said List on August 5, 2021 and till then the petitioner be not arrested. However the petitioner is directed to join the investigation as and when required by the Investigating Officer.

The allegations in the FIR, registered by the Economic Offences Wing of Delhi Police, are that the company, PPK Newsclick Studio Pvt Ltd, received Foreign Direct Investment (FDI) of Rs 9.59 crore from Worldwide Media Holdings LLC USA during the financial year 2018-19, in violation of the law. Senior Advocate Kapil Sibal, appearing for Purkayastha, contended that funding from the US-based company was received by the Newsclick in the year when there were no restrictions on FDI in digital news media. He is a famous journalist and runs a digital media platform. Digital media platforms were allowed to get money from outside… The cap came the following year, Sibal argued as he asserted that funding was received through legal banking channels under intimation to the Reserve Bank of India.

The senior advocate along with lawyer Arshdeep Singh submitted that a bare perusal of the FIR, which alleges offences of cheating and criminal breach of trust, showed no cognizable offence and at best, constituted violations of foreign exchange law which could be probed by Delhi police. He further argued that there was no question of siphoning off of funds as the same had been utilised for paying salaries to employees, consultancy fee and rent which are all permissible expenses in law, and that there was no loss to the exchequer in the process. Sibal said that he apprehended arrest in view of a notice directing Purkayastha to be present before the police on July 7. The high court has already granted Purkayastha protection from coercive action in the money laundering case being probed by the Enforcement Directorate, he said.

Additional Public Prosecutor Manjziit S Oberoi, appearing for Delhi Police, objected to the anticipatory bail plea, stating that Purkayastha "has directly come to the high court". Further hearing in Purkayastha's anticipatory bail would happen on August 5, he said. The FIR alleges that the investment was made by greatly overvaluing the shares of the 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, the company has violated the FDI and other laws of the country and has caused a loss to the government exchequer, it alleged. The company, through another petition, has already sought quashing of the Delhi Police FIR on the allegations of foreign funding on the ground that it does not disclose any cognisable offences as alleged.

The petition seeking quashing of the FIR is already listed for hearing on July 29. The high court had on June 21 directed the ED not to take coercive action against the news portal and its editor-in-chief in connection with the money laundering case.

It had issued notice to the ED on the portal's plea seeking a copy of the ECIR lodged by it in the case.

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first published:July 07, 2021, 23:32 IST
last updated:July 07, 2021, 23:32 IST