The Supreme Court stated that issues involving the PMLA cannot be decided solely on the basis of preponderance of the evidence; the accusation must be proven against the accused in court.
The apex court stated that the PREVENTION OF MONEY-LAUNDERING ACT, 2002 is a stringent statute enacted by the Indian constitution to prevent money laundering and penalize the culprit. The claim must be proven in court, and the decision should not be based merely on speculation.
In a case the verdict of the Madras High Court, which quashed the appellant's plea under section 482 of the Cr.P.C. was challenged in the Supreme Court.
The appellant is the managing partner of a partnership firm involved in sand mining. He had placed crores of rupees in three different bank accounts. This transaction attracts the attention of the income tax authority, which led to a search of his premises.
The income tax officials seized his crores of rupees and gold valued of crores after the search. Following this, the CBI filed a case against the appellant and other defendants under Sections 120-B read with Sections 409, 420 IPC, as well as Sections 13(2) and 13(1) (c) of the Prevention of Corruption Act.
The CBI filed three FIRs against the appellant and other defendants, two of which were rejected by the high court as schedule offences. However, the high court refused to dismiss the PMLA case under section 482 of the Criminal Procedure Code.
The appellant took this matter to the Supreme Court. The FIR was registered under Sections 3, 4, and 8(5) of the PMLA, and the ED issued an order attaching the Appellant's property under Section 5(1) of the PMLA, which the Adjudicating Authority rejected under Section 5(5) of the PMLA for confirmation of attachment.
The court cites the case of Radheshyam Kejriwal vs. State of West Bengal and examines the IT department's report as well as the CBI's closure statement, which states that the seizure of property under the case is significant.
According to the bench, the offence is not substantiated due to a lack of evidence. Bank and other official records were incomplete and did not provide sufficient information regarding the source of the money gathered. As a result, the ED was unable to establish a link between the unaccounted money and the PMLA violation.
The bench went on to say that the high court should investigate the case to see if the evidence gathered supports the allegations or not. A person cannot be charged with a crime unless the allegation is proven in court.
Furthermore, the court said that the evidence in this case is insufficient to convict the appellant, and the agency is also not convinced that the offence was committed under the PMLA.
As a result, until the allegation against the appellant is proven, the appellant is presumed innocent. The bench impugned the high court judgment and dismissed the complaint against the appellant.