New Delhi: The Enforcement Directorate (ED) is set to challenge in the Supreme Court a Delhi High Court ruling that quashed a money laundering case against news portal NewsClick and its editor-in-chief, Prabir Purkayastha, in connection with alleged violations of foreign direct investment (FDI) regulations.

Officials said the agency believes the High Court's order failed to adequately address several key arguments raised by the prosecution and has therefore decided to appeal the decision before the apex court.

In its judgment delivered on 29 May, the Delhi High Court quashed the Enforcement Case Information Report (ECIR) registered by the ED, holding that the continuation of the underlying First Information Report (FIR) by the Delhi Police's Economic Offences Wing (EOW) amounted to a "gross abuse of the process of law".

Justice Neena Bansal Krishna observed that once the predicate offence was set aside, the ED's proceedings under the Prevention of Money Laundering Act (PMLA) could not continue. The court further noted that there was no material to suggest the commission of an offence under Section 4 of the PMLA beyond general allegations of criminal conspiracy.

Responding to the judgment, NewsClick welcomed the decision, reiterating its longstanding position that the various cases and allegations against the organisation were attempts to undermine press freedom.

In a statement, the news portal said it had "always maintained that the numerous cases and charges against it are attacks on the freedom of the press".

"NewsClick's only fault has been to practise journalism that covers people's movements. The Delhi High Court vindicates our position. It also takes a strong stand in support of independent journalism in India," the statement said.

The organisation added that it remained confident that other proceedings against it would also be resolved in its favour, reinforcing the principle of press freedom.

However, ED officials argued that the High Court had incorrectly assessed the case. According to the agency, the investigation was based on allegations that false representations were made to statutory authorities and banks regarding the nature and source of foreign investments, the identity of investors and the valuation of shares.

Officials maintained that inducement of public authorities through alleged misrepresentation could amount to cheating, even where no private individual was directly deceived.

They further contended that the High Court, at the stage of considering a petition to quash proceedings, should have examined whether the allegations disclosed an offence if accepted at face value, rather than assessing whether those allegations had already been conclusively proven.

According to the ED, investigators collected emails and recorded statements from several individuals, including former associates of Purkayastha, which allegedly indicated efforts by PPK Newsclick Studio Pvt Ltd to secure foreign investment while avoiding government approval requirements.

The agency claims that the company altered its business structure and received investment from Worldwide Media Holdings LLC through arrangements designed to facilitate the inflow of foreign funds.

The case stems from an ED investigation launched in 2021. The agency conducted searches at NewsClick's premises and Purkayastha's residence in September that year and subsequently attached a flat in Delhi's Saket area valued at approximately ₹4.52 crore, along with fixed deposits worth ₹41 lakh, as part of its probe.

The Supreme Court will now decide whether the High Court's order should be upheld or whether the money laundering proceedings can be revived.