PMLA burden of proof and disclosure of lawful source upheld for frozen bank accounts and seized digital records.

Freezing of bank accounts and retention of seized documents and digital devices under the Prevention of Money Laundering Act were supported by material linking the person to entities involved in laundering and by recovery of relevant records from his possession. The special burden framework under the Act required him to rebut the presumption regarding proceeds of crime and to disclose the lawful source of the funds in the frozen accounts. Because he failed to produce bank records or other evidence proving the claimed sources, the freezing and retention order was upheld.

---

---

Issues: Whether the freezing of the appellant's bank accounts and retention of seized documents and digital devices under the Prevention of Money Laundering Act, 2002 were justified in view of the material indicating the appellant's involvement and his failure to establish lawful source of funds.

Analysis: The appellant was found connected with the companies and entities involved in laundering of funds, and relevant documents relating to loan utilisation and self-help groups were recovered from his possession. The reliance placed on decisions under other statutes did not assist, because liability and evidentiary burden had to be tested under the special scheme of the Prevention of Money Laundering Act, 2002. Under Section 24 of the Prevention of Money Laundering Act, 2002, the burden shifted to the appellant to rebut the presumption regarding proceeds of crime, and under Section 8(1) of the Prevention of Money Laundering Act, 2002 he was required to disclose the source of the money in the frozen accounts. He failed to produce bank records or other evidence showing that the amounts came from his claimed sources.

Conclusion: The freezing and retention order was upheld, and the appeal failed.

---