A Critical Evaluation Of The Reverse Burden Of Proof Under Section 24 Of The Prevention Of Money Laundering Act, 2002
Kiran Wagaj, New Law College, Pune
Dr. Jyoti Dharm, New Law College, Pune
ABSTRACT
The Prevention of Money Laundering Act, 2002 (PMLA) is India's principal legislative response to the growing threat of money laundering and the concealment and utilisation of proceeds derived from criminal activity. One of its most distinctive features is Section 24, which incorporates a reverse burden of proof in proceedings relating to proceeds of crime. The provision permits the Authority or Court, subject to its terms, to presume that proceeds of crime are involved in money laundering, thereby requiring the person proceeded against to rebut the statutory presumption.
The reverse burden under Section 24 raises an important question of criminal jurisprudence: to what extent can the conventional presumption of innocence and the prosecution's burden to establish guilt be displaced in the interests of effective enforcement of economic offences? The issue becomes particularly significant because the PMLA operates through a combination of stringent investigative powers, attachment and confiscation provisions, restrictive bail conditions and evidentiary presumptions.
This paper critically examines the constitutional and jurisprudential validity of Section 24. It analyses the distinction between the legal burden and evidentiary burden, the presumption of innocence, the constitutional protections under Articles 14 and 21, and the Supreme Court's interpretation of Section 24 in Vijay Madanlal Choudhary v Union of India. Particular emphasis is placed upon the Court's requirement that the prosecution must first establish three foundational facts: the commission of a scheduled offence, the derivation or obtaining of property from the criminal activity, and the accused's direct or indirect involvement in a process or activity connected with such property.
The paper argues that Section 24 can be constitutionally sustained only when treated as a conditional evidentiary presumption rather than as a complete reversal of the prosecution's burden. The prosecution must establish the foundational facts through cogent material before the burden can shift to the accused. The subsequent jurisprudence, particularly Prem Prakash v Union of India, reinforces this principle. The paper concludes that the constitutional legitimacy of Section 24 depends less upon the mere existence of a reverse burden and more upon the rigour with which courts enforce the foundational- facts requirement.
