Synopsis

The petitioner, a digital news media company, received foreign direct investment (FDI) of USD 1.5 million from a US-based entity (Worldwide Media Holdings LLC) in 2018 after obtaining a clarification from the Ministry of Information and Broadcasting that online news publications did not fall under the print media FDI cap. An FIR was registered under Sections 406, 420 and 120B IPC on a complaint by a third party, alleging overvaluation of shares, siphoning of funds, and circumvention of FDI limits. The ED registered an ECIR under PMLA based on the same FIR. The High Court quashed both the FIR and the ECIR, holding that: (i) no offence of cheating or criminal breach of trust was made out as there was no aggrieved person; (ii) the FDI was compliant with applicable laws and RBI had found no violation; (iii) criminal conspiracy requires an illegal agreement, which was not established; (iv) once the predicate FIR is quashed, the ECIR under PMLA cannot survive. The court also noted that the FIR was filed by a stranger, not by the investor, and that the investigation was mala fide.

1. Heading of the judgment

High court of delhi at new delhi

Writ petition (criminal) no. 1129 of 2021, 1130 of 2021 and 1146 of 2021

M/s ppk newsclick studio pvt. ltd. & anr. (petitioners) vs. State of nct of delhi & anr. (respondents)

Coram: hon’ble ms. justice neena bansal krishna

Core Law: Indian Penal Code, 1860 – Sections 406, 420, 120B – Cheating, criminal breach of trust, criminal conspiracy – Prevention of Money Laundering Act, 2002 – Sections 3, 4 – Scheduled offence – Quashing of predicate FIR leads to quashing of ECIR.

Court: High Court of Delhi at New Delhi
Coram: Hon’ble Ms. Justice Neena Bansal Krishna (Single Judge)
Date of Judgment: May 29, 2026
Case Nos.: W.P.(Crl.) 1129/2021, 1130/2021, 1146/2021
Citation: 2026:DHC:5098

2. Legal framework

Major laws and provisions involved:

• Indian Penal Code, 1860 – Sections 406 (criminal breach of trust), 420 (cheating), 415 (definition of cheating), 120B (criminal conspiracy)

• Prevention of Money Laundering Act, 2002 – Sections 3 (offence of money laundering), 4 (punishment), 2(1)(y) (scheduled offence), 65 (CrPC applicable)

• Code of Criminal Procedure, 1973 – Sections 154, 155, 482 (inherent powers to quash)

• Foreign Exchange Management Act, 1999 (FEMA) – FDI regulations, automatic route

• Constitution of India – Articles 14, 19(1)(a), 21, 226

Subject matter of the judgment:

Whether an FIR alleging cheating, criminal breach of trust and criminal conspiracy in relation to FDI received by a digital news media company can be sustained when the investing entity itself has not complained, the transaction complied with RBI regulations, and the complaint was made by a third party with no locus; and whether the ECIR registered under PMLA based on such FIR can survive when the predicate FIR is quashed.

Key legal principles applied:

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