Burden of Proof under Section 24 PMLA: What the Prosecution Must Establish First
Section 24 reverses the ordinary evidentiary burden in defined circumstances, but it does not erase the prosecution’s foundational obligations. The presumption concerns proceeds of crime; it cannot manufacture the scheduled offence, the property or the accused’s connection to it.
The statutory structure
In proceedings relating to proceeds of crime, Section 24 directs the Authority or court to presume that proceeds are involved in money-laundering where the person is charged with the Section 3 offence, unless the contrary is proved. For another person, the forum may presume involvement. The distinction between “shall” and “may” matters.
Foundational facts remain necessary
ED must first identify the scheduled offence, the criminal activity, the property alleged to be derived or obtained, and material connecting it to the person or transaction. Yash Tuteja v. Union of India confirms that without a scheduled offence there can be no proceeds of crime and therefore no Section 3 offence. Section 24 cannot repair that jurisdictional absence.
Rebutting the presumption
The defence ordinarily relies on a lawful source trail: audited accounts, bank statements, contracts, tax records, loan documentation, inheritance, contemporaneous valuations and evidence of bona fide consideration. The explanation must address the specific property and transaction rather than offer a general claim of financial legitimacy.
The standard for rebuttal is not proof beyond reasonable doubt. Presumptions are ordinarily rebutted on the applicable civil standard by producing a credible alternative account. The ultimate criminal conviction still requires the court to be satisfied according to criminal-law standards after considering the entire evidence.
No presumption of every allegation
Section 24 does not compel acceptance of an involuntary statement, an arbitrary valuation or an unsupported allegation of knowledge. Nor does it shift the burden to prove innocence before ED identifies the alleged proceeds. Courts must prevent circular reasoning in which property is labelled proceeds only because the owner cannot instantly explain it.
The provision is powerful but sequenced: foundation first, presumption next, rebuttal thereafter, and final adjudication on the whole record.
Sources
Prevention of Money-Laundering Act, 2002, Sections 2(1)(u), 3 and 24: https://www.indiacode.nic.in/handle/123456789/15402
Supreme Court of India, Vijay Madanlal Choudhary v. Union of India, 2022 INSC 757.
Supreme Court of India, Yash Tuteja v. Union of India, 2024 INSC 301: https://api.sci.gov.in/supremecourt/2023/14771/14771_2023_8_68_52049_Judgement_08-Apr-2024.pdf
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