In light of recent events, the people of India witnessed the arrest of the chief minister of the state of Delhi Mr. Arvind Kejriwal under the Prevention of Money Laundering Act (PMLA). The purpose of this act is to prevent money laundering under all circumstances.
PMLA is classified under certain sections, with all sections stating different sets of rules the citizens of India must abide by. One such section is Section 24 of the PMLA of India [Prevention of Money Laundering Act, 2002] which is related to the burden of proof in certain cases. It is a very basic section of the prosecution of an offence of money laundering and involves serious concerns of both the accused and the prosecution. The section states that "The burden of proving that proceeds of crime are untainted property shall be on the accused when a person is accused of having committed the offense under section 3.”
This section, in effect, reverses the burden of proof in cases relating to money laundering. Under almost all criminal jurisprudence, the burden to prove the guilt of the accused lies with the prosecution beyond reasonable doubt. Section 24, however, shifts the entire burden onto the accused in money laundering cases.
Section 24 of PMLA clearly states that this section is only imposed on individuals with offenses under Section 3 of PMLA, which defines the offense of money laundering. And imposed on people who are accused of assisting the criminal by knowing the information related to it. Section 24 works conjunctively with other provisions of the PMLA, particularly:
a) Section 3
b) Section 23
c) Section 45
The burden reversal is justified because money laundering is a serious economic offense that can have very serious implications for national security and economic stability. Thus, conventional rules of evidence might be inadequate against such sophisticated crimes.
Many of these measures are now part of the anti-money laundering law of a lot of countries. Several high-profile cases have also been decided in India based on the application of Section 24. They have involved politicians, businessmen, and other public figures, which proves that it is not merely a provision but far-reaching in its application.
This section is criticized for potentially violating human rights and principles of due process, it has also been stated that this provision can be potentially misused in terms of harassing innocent people. In the case of a subdivision, it is practically impossible for an accused to prove a negative, that he or she does not have proceeds of crime.
Yet, Section 24 of PMLA substantially strengthened the investigating agencies in India, including the Enforcement Directorate (ED). This has resulted in more vigorous investigations and prosecutions of money laundering cases.
Section 24 also contributes to international cooperation on money laundering cases. It brings the legal framework of India closer to global standards and enables better collaboration in trans-border investigation matters. The provision speaks about entities or individuals involved in large volumes of financial activities. It further led to enhanced due diligence and record-keeping practices in ensuring one can respond to proving the legitimacy of the assets at any moment in time if need be.
Although Section 24 of the PMLA has not undergone any significant amendment, recent amendments brought to the PMLA have strengthened its entire framework, indirectly affecting the enforcement of Section 24.
Section 24 has been considered one of the most potent weapons under the PMLA against money laundering in India. As it had been hailed for making the prosecution of complex financial crimes more effective, it mainly remains a matter of legal and ethical debate. With the development of our country to become an economic giant, this act of prevention of money laundering provides a sense of security and accountability towards the taxpayers of the country. To get detailed information about Section 24 of the PMLA Act, you must visit CA Manoj K Pahwa, who will provide detailed information on all your concerns about Section 24 of PMLA.