The Enforcement Directorate (ED) has petitioned the Supreme Court of India challenging a Delhi High Court order that granted relief to news portal NewsClick, arguing that the bench exceeded its statutory remit under criminal jurisprudence by conducting what amounted to a "mini-trial" while cancelling proceedings.

In its special leave petition, the federal financial crimes agency contended that the High Court improperly scrutinized contested factual matters at a preliminary stage, contrary to settled Supreme Court precedents governing the quashing of First Information Reports (FIRs) and enforcement complaints.

Agency Contends Jurisdiction Exceeded

The central investigative agency argued that constitutional courts exercising inherent powers under Section 482 of the Code of Criminal Procedure (CrPC) must confine their assessment to whether the prima facie allegations disclose the commission of a cognizable offence. According to the ED, evaluating evidence in depth and drawing definitive factual conclusions before trial effectively supplants the statutory role of the trial court.

The agency's petition highlighted that disputed questions of fact involving complex financial flows, alleged foreign remittances, and regulatory compliance cannot be resolved during a quashing petition. The ED maintains that detailed evidentiary analysis must be tested through examination and cross-examination during trial proceedings rather than evaluated summarily.

The Legal Background

NewsClick and its senior editorial leadership have been under multi-agency scrutiny over foreign direct investment (FDI) inflows and alleged violations of foreign exchange and anti-money laundering regulations. The probe, initiated following regulatory references regarding funds transferred from entities linked to foreign jurisdictions, prompted parallel proceedings by multiple statutory agencies.

The Delhi High Court had earlier intervened to grant relief, examining the foundational merits of the predicate offence that underpinned the agency's enforcement proceedings. In quashing the underlying action, the High Court held that the ingredients necessary to sustain the prosecution were absent based on the record presented.

Question of Law Before Supreme Court

The appeal brings to the fore an established procedural debate in Indian criminal law regarding the boundaries of High Court oversight under Section 482 of the CrPC:

Threshold for Intervention: The Supreme Court has repeatedly held in landmark rulings, including State of Haryana v. Bhajan Lal*, that inherent powers should be exercised sparingly and in rare cases where the complaint does not disclose any cognizable offence. * Prohibition Against Mini-Trials: Settled judicial doctrine explicitly prohibits High Courts from entering into an appraisal of evidentiary sufficiency or holding mini-trials prior to the framing of charges. * Predicate Offence Interplay: Under the Prevention of Money Laundering Act (PMLA), the survival of an ED investigation remains closely intertwined with the existence of a valid predicate offence.

The apex court is expected to list the agency's plea for preliminary hearing in the coming days, where the bench will assess whether the High Court committed a procedural error in terminating the proceedings.