In a significant ruling, the Delhi High Court has quashed an FIR registered against digital news platform NewsClick and related proceedings initiated by the Enforcement Directorate (ED), holding that the allegations concerning foreign investment did not disclose offences of cheating or criminal breach of trust.
Justice Neena Bansal Krishna observed that even if the allegations contained in the complaint were accepted at face value, the essential ingredients of the offences invoked by the police were absent.
Background of the Case
The case arose from FIR No. 116/2020 registered by the Economic Offences Wing (EOW) on allegations that NewsClick had received foreign direct investment (FDI) through Worldwide Media Holdings LLC and had allegedly violated FDI norms by issuing shares at a high premium.
The complaint also alleged that a substantial portion of the foreign funds was spent on salaries, consultancy fees, rent, and other operational expenses, and suggested that the investment structure was designed to bypass regulatory restrictions.
NewsClick and its promoters challenged the FIR before the High Court, arguing that the investment had been received through legal banking channels, duly reported to the Reserve Bank of India (RBI), and was compliant with the law applicable at the time.
The Court examined the regulatory framework governing digital media in 2018 and noted that the Ministry of Information and Broadcasting had clarified that online news publications did not fall within the ambit of print media.
Referring to the timing of the investment, the Court observed that there was no FDI cap applicable to digital news media when the investment was received.
“The investment agreement cannot be said to be in violation of any law or disclosing any criminal offence,” the bench noted while discussing the transaction between NewsClick and the foreign investor.
On the issue of share valuation, the Court found that the valuation had been conducted through a chartered accountant in accordance with FEMA regulations and internationally accepted valuation methods.
The Court further held that the price at which shares were ultimately issued was a commercial decision arrived at through negotiations between the parties.
Calling it an economic decision, the bench observed that it did not “spell out any criminal offence.”
The Court noted that for an offence of cheating under Section 420 IPC, there must be a person who was deceived and induced to part with property.
In the present case, the foreign investor itself had not made any complaint alleging deception.
“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.
Similarly, while examining the offence of criminal breach of trust under Section 406 IPC, the Court found no material showing entrustment of property or its misappropriation.
The Court also rejected the allegation that expenditure on salaries, consultancy charges and rent amounted to siphoning of funds, noting that such expenses are normal for a company operating in the digital media sector.
Holding that neither cheating nor criminal breach of trust was disclosed from the allegations, the Delhi High Court concluded that continuation of the criminal case would amount to an abuse of the legal process.
“The continuation of such FIR is nothing but a gross abuse of the process of law,” the Court said while quashing the FIR.
As the Enforcement Directorate's ECIR and money laundering proceedings were founded on the same allegations, the Court also set aside the related proceedings.
Case Details
Case Title: M/s PPK NewsClick Studio Pvt. Ltd. & Anr. v. State of NCT of Delhi & Ors. (Connected Matters)
Case Number: W.P. (CRL.) No. 1130/2021, W.P. (CRL.) No. 1129/2021 and W.P. (CRL.) No. 1146/2021
Judge: Justice Neena Bansal Krishna
Decision Date: 29 May 2026
