Disproportionate Assets Justifies Presumption of Money Laundering u/s 24 PMLA: Jharkhand HC Dismisses Discharge Plea of Forest Officer [Read Order]

The Jharkhand High Court has rejected the criminal revision appeal of a former Forest Range Officer, who challenged the dismissal of his application for discharge in a money laundering case. The High Court dismissed the revision petition holding that the record revealed grave suspicion and the Special Court was justified in refusing discharge.

Petitioner Digamber Singh had sought dismissal from the case brought on the basis of an ECIR by the Enforcement Directorate (ED). The ECIR was registered on the basis of a predicate offence recorded by the Anti-Corruption Bureau (ACB) under the Prevention of Corruption Act, and a charge sheet has already been filed charging buildup of disproportionate assets. As per the ED probe, the petitioner’s assets were 608 per cent larger than his known sources of income, which included movable goods worth Rs 2.71 crore, a luxurious residential structure and a cash hoard of Rs 31.50 lakh.

The petitioner submitted that the prosecution had not identified any particular property acquired from the illicit conduct and that his wife had separate sources of income including income from rental and agricultural revenues which justified the wealth. He argued that the closure report in the latter FIR and the discharge of his wife in the predicate offence should exonerate him from the PMLA liability.

The Court did not accept these arguments and considered the definitions of ‘proceeds of crime’ and ‘money laundering’ under Sections 2(1)(u) and 3 of the Act. Justice Sujit Narayan Prasad agreed with the Special Court’s order and said assets of over Rs. 4 crore against a legitimate lifetime salary of around Rs. 57 lakh, creates a mandatory statutory presumption of money laundering under Section 24 of the Prevention of Money Laundering Act (PMLA).

The ED's investigation revealed that the petitioner's assets were 608% higher than his known sources of income, comprising movable properties worth Rs. 2.71 crore, a lavish residential building, and a cash hoard of Rs. 31.50 lakh.

It was observed that the Explanation to Section 2(1)(u) inserted in 2019, makes it clear that proceeds of crime includes any property earned, directly or indirectly, from criminal activity relevant to a listed offence.

The Court heavily relied on the statutory presumption under Section 24 PMLA. It said that when the prosecution proves the ‘foundational fact’ of assets disproportionate to the known sources of income, the duty shifts on the accused person to prove that the assets are not tainted. The Court observed that the petitioner cannot show convincing documentary evidence in support of allegations of agricultural income or dairy farming and simple assertions cannot be utilised to obtain discharge.

At this point the law does not enable a short trial... Quoting Supreme Court precedents, the Court said, "At the time of drafting of charge, the Court is expected to see if there is a prima facie case for proceeding against the accused. “

The High Court dismissed the revision petition holding that the record revealed grave suspicion and the Special Court was justified in refusing discharge.

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