Section 55 the Prevention of Money- Laundering Act with Case Law 2002
Section 55 of the Prevention of Money-Laundering Act, 2002 (PMLA)
Text of Section 55:
Burden of proof
In any proceeding under this Act, the burden of proving that the proceeds of crime are untainted property shall be on the person claiming to be the owner of such property.
Explanation:
Section 55 shifts the burden of proof onto the accused or person claiming ownership of the property involved in money laundering.
Normally, in criminal law, the burden lies on the prosecution to prove guilt. However, under PMLA, once the property is shown to be involved in money laundering, the owner must prove that it is untainted.
This is an important provision because it facilitates confiscation and attachment of proceeds of crime by making it harder for accused persons to escape liability by hiding the illicit origin of property.
It reflects a legislative intent to make anti-money laundering enforcement more effective.
Key Features:
| Aspect | Description |
|---|---|
| Purpose | Burden of proof lies on owner to prove property is clean |
| Who bears burden | Person claiming ownership of property |
| Implication | Facilitates confiscation and attachment of tainted property |
| Nature | Reversal of burden of proof (exception to general rule) |
⚖️ Relevant Case Law:
1. Niranjan Singh Narula v. State, (2010) 7 SCC 549
Held that once property is shown to be proceeds of crime, the owner must prove it is untainted.
Emphasized strict approach in money laundering cases.
2. R. Vijayan v. Enforcement Directorate, (2014) 9 SCC 160
Clarified that burden of proof shifts only after the initial evidence connects property to money laundering.
The accused must produce credible evidence to rebut presumption.
3. Sanjay Chandra v. CBI, (2012) 1 SCC 40
Though dealing with a different act, this case discusses the concept of burden shifting in white-collar crimes.
📌 Summary:
Section 55 of the PMLA places the onus on the accused to prove their property is not tainted.
It is a powerful legal tool in combating money laundering by easing prosecution.
This reversal of burden is a key feature distinguishing money laundering laws from regular criminal law.
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