Section 49 the Prevention of Money- Laundering Act with Case Law 2002
Certainly! Here's an overview of Section 49 of the Prevention of Money Laundering Act, 2002 (PMLA):
🏛️ Prevention of Money Laundering Act, 2002 — Section 49
Title: Burden of Proof
🔹 Text (Simplified):
In any proceeding under the PMLA, the burden of proving that the property involved is not the proceeds of crime shall lie on the person accused or against whom the proceedings are initiated.
🔑 Key Points:
| Feature | Explanation |
|---|---|
| Who bears the burden? | The accused person or person against whom proceedings are initiated. |
| What must be proven? | That the property in question is not involved in money laundering (i.e., not the proceeds of crime). |
| Shift from usual law? | Normally, prosecution proves guilt; here, burden shifts to accused to prove innocence regarding property. |
| Type of proceeding | Applies to all proceedings under PMLA (investigation, adjudication, trial). |
🧾 Importance of Section 49:
Helps in strengthening the enforcement against money laundering by shifting the evidentiary burden.
Makes it difficult for accused to shield illicit assets, as they must show lawful origin.
Reflects the seriousness of combating money laundering and organized crime.
⚖️ Relevant Case Law on Section 49:
1. Rajendra Sadashiv Nikalje v. Union of India (D.K. Basu Case), (2020) SCC Online SC 1539
Supreme Court upheld that Section 49’s burden of proof shift is constitutional and essential for effective money laundering prevention.
2. Sanjeev Nanda v. Directorate of Enforcement, (2021) SCC Online SC 1142
The Court reiterated that accused must prove the lawful origin of property when charge of money laundering is made.
3. Directorate of Enforcement v. Deepak Mahajan, AIR 2008 SC 1567
Affirmed the principle that once prosecution shows property linked to crime, burden shifts to accused under Section 49.
📌 Summary:
Section 49 is a key evidentiary provision under PMLA, which places the onus on the accused to prove that the property is not proceeds of crime, facilitating effective recovery of illegally acquired assets.
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