The Madras High Court has held that mere possession of tainted money is sufficient to invoke the provisions of Prevention of Money Laundering Act (PMLA) and the burden to prove the innocence lies upon the persons facing money-laundering charges.
CHENNAI: The Madras High Court has held that mere possession of tainted money is sufficient to invoke the provisions of Prevention of Money Laundering Act (PMLA) and the burden to prove the innocence lies upon the persons facing money-laundering charges.
“Therefore, mere possession of proceeds of crime would be sufficient to invoke the provisions of PMLA. Using the proceeds of crime by itself is an offence. Since the scope of Section 3 is wider enough to cover various circumstances in order to curb the economic offences, high court cannot restrict its meaning so as to restrain the authorities from invoking the provisions of PMLA,” observed the division bench of Justices SM Subramaniam and AD Maria Clete in an order passed on Friday.
Pointing out that section 24 of PMLA deals with “burden of proof”, the bench said, in a case of money laundering, the authority (ED) or the court shall presume that such proceeds of crime are involved in money laundering, unless the contrary is proved.
“Therefore, the presumptions of the authorities, investigation conducted and documents collected would be sufficient to proceed against a person under PMLA. Unless the contrary is proved, we presume that such proceeds of crime are involved in money laundering. Therefore, the burden of proof lies on the affected person,” the bench said.
The order was passed while dismissing an appeal filed by S Srinivasan, a staff of Indian Overseas Bank (IOB), challenging an order of the special court for PMLA cases refusing to discharge him from the money laundering case registered by ED based on the FIRs registered by the CBI on charges of criminal conspiracy, corruption and disproportionate assets against certain staff, including L Balasuramaniam and Srinivasan, for siphoning of more than Rs 2 crore from the funds of the employees welfare trust.
The high court bench upheld the order of the special court. “The trial court considered the allegations set out in the complaint and formed an opinion that the petitioner has failed to make out a prima facie case for discharge. We do not find any infirmity or perversity with reference to the findings made by the special court rejecting the discharge petition,” the bench said in the order.
