New Delhi: Investigating agencies are abusing the process of law to subject NewsClick to criminal prosecution to create a "chilling effect", the news portal alleged in the Delhi High Court today.

The court was hearing the portal's request to quash the cases registered by the Delhi Police and the Enforcement Directorate against it over alleged violation of foreign funding laws.

"I am being targeted because I happen to be an entity engaged in news circulation on digital platforms," said senior advocate Siddharth Agarwal, representing NewsClick, before Justice Saurabh Banerjee.

"We have reached a place where criminal law is used as a weapon of choice for chilling effect. There is nothing here that needs to be investigated," the senior lawyer argued.

The criminal cases, he added, were intended to "silence" independent and impartial reporting, discourage journalists and "create a chilling effect".

PPK Newsclick Studio Pvt Ltd, which owns NewsClick, moved the High Court in 2021 seeking a quashing of the criminal cases over allegations of violation of Foreign Direct Investment (FDI) law.

Mr Agarwal submitted that foreign funds came to the company legitimately and in due compliance with the applicable law and the offences of criminal breach of trust and cheating under the Indian Penal Code, as alleged, was not made out.

"The court will have to consider... if there is an abuse of process by the investigating or prosecuting agencies. There is a context to the matter," he stated.

On Tuesday, senior advocate Kapil Sibal argued on behalf of the petitioner and said that the case against it was "completely dishonest".

The allegation in the FIR, registered by the Economic Offences Wing of the Delhi Police, is that the company, PPK Newsclick Studio Pvt Ltd, received FDI to the tune of ₹ 9.59 crore from M/s Worldwide Media Holdings LLC USA during the financial year 2018-19 in violation of the law.

The FIR alleged the investment was made after greatly overvaluing the shares of the company to avoid the alleged cap of 26 per cent FDI in a digital news website.

It has further alleged that over 45 per cent of this investment was diverted for the payment of salary/consultancy, rent, and other expenses, which payments are alleged to have been made for ulterior motives.

Therefore, the company has violated the FDI and other laws of the country and has caused a loss to the government exchequer, it has claimed.

The ED initiated its probe on the basis of the Delhi Police FIR and conducted searches on the premises of the digital news platform and several other places in connection with the money received from overseas.

On July 7, 2021, the high court granted interim protection from arrest to NewsClick founder Prabir Purkayastha in the Delhi Police case and directed him to join the investigation.

On June 21, 2021, the high court directed the ED to not take coercive action against NewsClick and Purkayastha, its editor-in-chief, in connection with the money laundering case.

Prabir Purkayastha was arrested by the Special Cell of the Delhi Police on October 3 in a separate case lodged under the anti-terror law Unlawful Activities (Prevention) Act for allegedly receiving money to spread pro-China propaganda. He is in judicial custody. The hearing in the matter will continue on November 9.