Where Money-Laundering involves two or more inter-connected transactions and one or more such transactions is or are proved to be connected with Money-Laundering, then for the purposes of Adjudication or Confiscation, under Section 8 or for the trial of the Money-Laundering offence, it shall unless otherwise proved, be presumed that the remaining transactions form part of such inter-connected transactions associated with Money-Laundering

Under Section 24 of PMLA, in any proceeding relating to the proceeds of crime a presumption is raised by the authority or court against any person charged with the offence of Money-Laundering, unless the contrary is proved by the accused, that such proceeds of crime are involved in money-laundering; and in the case of any third person, such authority or court may also presume that such proceeds of crime are involved in Money-Laundering.

Essentially, under PMLA, the burden of proof lies on the person who claims that the proceeds of crime alleged to be involved in Money-Laundering, are not involved in Money-Laundering. The presumption against the accused or any 3rd party is good enough to discharge the onus of the authorities under PMLA. Even in the case of Records, and Properties, which are found in the possession or control of any person in the course of a survey or search under the Act (Section 16, Section 17 and Section 18 of PMLA), under a presumption is raised that such records or property belongs to such person, and the contents of such records are true, and further that signatures and any part of such records in hand-writing of a particular person or in the hand-writing of such person, the presumptions as to the records in property are absolute, and the onus to prove the same otherwise, lies on such person.

It is clear that, a person accused of an offence under Section 3 of PMLA, whose property is attached and proceeded against for Confiscation, shall discharge the onus of proof (Section 24) vested in him by disclosing the sources of his Income, Earnings or Assets, out of which or means by which he has acquired the property attached, to discharge the burden that the property does not constitute proceeds of crime.

Where a transaction of acquisition of property is part of inter-connected transactions, the onus of establishing that the property acquired is not connected to the activity of Money-Laundering, is on the person in ownership, control or possession of the property, though not accused of a Section 3 offence under PMLA, provided one or more of the interconnected transactions is or are proved to be involved in Money-Laundering (Section 23).

Presumption under Section 23 of PMLA:

In the case of B. Rama Raju, S/o B. Ramalinga Raju Vs. Union of India (UOI), [MANU/TN/1696/2011]; [(2012)1MLJ419], it was held that:

115. The presumption enjoined by Section 23 is clearly a rebuttable presumption i.e., presumptio pro tantum.116. In Izhar Ahmad v. Union of India MANU/SC/0094/1962 : AIR 1962 SC 1052, Gajendragadkar, J (as his Lordship then was) observed (in the majority opinion of the Constitution Bench) that: The term "Presumption" in its largest and most comprehensive signification, may be defined to be an inference, affirmative or disaffirmative of the truth of false-hood of a doubtful fact or proposition drawn by a process of probable reasoning from something proved or taken for granted. Quoting with approval the statement of principle set out in the Principles of the Law of Evidence by Best, his Lordship observed that when the rules of evidence provide for the raising of a rebuttable or irrebuttable presumption, they are merely attempting to assist the judicial mind in the matter of weighing the probative or persuasive force of certain facts proved in relation to other facts presumed or inferred.

To invoke the presumption under Section 23 of the PMLA, at least one of the transactions has to be proved to the "proceeds of crime" transaction.

You may also refer to the following link for details on anti-money laundering (AML) laws in India: http://moneylaundering.legal .

*Vijay Pal Dalmia, Advocate & Partner Vaish Associates Advocates
Email: vpdalmia@vaishlaw.com   Mobile: 09810081079

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