The Delhi High Court on Tuesday set aside the trial court's order in the money laundering case against NewsClick, a digital news platform. The court ruled that the Enforcement Directorate (ED) had failed to establish a prima facie case of money laundering against the accused.
Background of the Case
The case originated from a complaint filed by the ED, alleging that NewsClick had received foreign funds in violation of the Foreign Contribution (Regulation) Act (FCRA). The ED claimed that the funds were routed through dubious transactions and amounted to money laundering under the Prevention of Money Laundering Act (PMLA).
Trial Court's Order
The trial court had earlier taken cognizance of the ED's complaint and issued summons to the accused. However, the Delhi High Court found that the ED's case was built on weak foundations and lacked concrete evidence.
High Court's Observations
Justice Anu Malhotra, while quashing the order, observed that the ED had not produced any credible evidence to show that the funds in question were proceeds of crime. The court noted that the mere violation of FCRA does not automatically constitute money laundering under the PMLA.
The court also criticized the ED for its reliance on a single transaction that was not substantiated by any supporting documents. It said that the ED's investigation was flawed and that the agency had failed to meet the threshold required for initiating prosecution.
Implications of the Verdict
The verdict is a significant setback for the ED, which has been actively pursuing cases of alleged money laundering against media organizations. Legal experts say that the judgment reinforces the principle that the PMLA cannot be used as a tool to harass individuals or entities without sufficient evidence.
NewsClick welcomed the decision, stating that it vindicates its stand that the allegations were baseless. The platform's editor-in-chief said that the case was an attempt to intimidate independent journalism.
Reactions
Several journalists and civil liberties groups have hailed the judgment as a victory for press freedom. They argue that the case was a classic example of misuse of investigative agencies to silence dissenting voices.
The ED, however, has indicated that it may challenge the order in the Supreme Court. A senior ED official said that the agency respects the court's decision but believes that there is sufficient material to proceed with the case.
