Acquittal upheld in money laundering case due to failure proving proceeds of crime under PMLA Section 44(1)

The HC dismissed an appeal challenging the acquittal of an accused in a money laundering case involving falsification of accounts, forgery and cheating. The trial court had acquitted the accused after finding that the complainant failed to prove the fundamental requirement under PMLA - that the investigated crime generated proceeds of crime leading to property acquisition. The HC held that acquittal orders should not be disturbed unless perverse or contrary to evidence. The complainant proceeded on presumption without placing material evidence about the crime or proceeds, failed to invoke Section 44(1) of PMLA, and did not seek simultaneous trial with the pending predicate offence case.

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Issues Involved:
1. Admissibility of evidence and statements.
2. Prematurity of the prosecution under the PMLA.
3. Independence of PMLA proceedings from the predicate offence.
4. Burden of proof on the prosecution under the PMLA.

Summary:

Admissibility of Evidence and Statements:
The trial court acquitted the accused primarily because the FIR copy of the predicate offence was an attested copy without a date, and the original statements of the accused were not produced, making the photocopies unreliable. Additionally, the statements of the accused were deemed compulsory testimony, prohibited under Article 20(3) of the Indian Constitution. The computer printouts of the bank statements were not certified as per Section 65B of the Indian Evidence Act.

Prematurity of the Prosecution under the PMLA:
The court held that the prosecution for money laundering was premature since the predicate offence registered by the CBI was still pending. The court noted that launching a criminal prosecution for money laundering before the final verdict in the predicate offence was premature. The trial judge also hypothesized that if the accused were acquitted in the predicate offence, the prosecution under the PMLA would become non-est.

Independence of PMLA Proceedings from the Predicate Offence:
The appellant argued that proceedings under the PMLA are independent of the proceedings under the schedule offence. The statements recorded u/s 50(2) and (3) of the PMLA by Revenue Officials are admissible in evidence and not hit by Article 20(3) of the Indian Constitution. The appellant cited Supreme Court judgments to support this view. However, the trial court rejected this argument, leading to the acquittal of the accused.

Burden of Proof on the Prosecution under the PMLA:
The court emphasized that the PMLA is an independent sui generis Act, and the prosecution must prove the case independently without presuming that the accused derived proceeds from the crime. The trial court found that the prosecution failed to provide material evidence about the crime or the proceeds from it. The court also noted that the trial in the predicate offence was pending, and the Prevention of Corruption Act provides for the forfeiture of property acquired through wrongful gain.

Conclusion:
The High Court upheld the trial court's judgment, stating that the prosecution failed to marshall evidence connecting the proceeds of crime, making their case weak. The court also noted that the appellant did not attempt to invoke Section 44(1) of the PMLA for simultaneous trials to avoid conflicting verdicts. Therefore, the criminal appeal was dismissed.

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