Discharge at PMLA stage turns on prosecution material alone, with prima facie proceeds of crime enough to proceed.
At the discharge stage, the court's scrutiny is confined to whether the prosecution record discloses sufficient ground to proceed; defence material, detailed evidence appraisal, and a mini trial are impermissible. Revisional interference is justified only for patent illegality or where the case is groundless on the face of the record. Applying that standard, the complaint, statements, and investigation material were treated as sufficient to proceed. The materials were said to show assets beyond known income, routing through bank accounts and insurance policies, use of family accounts, and investments in immovable property, so a prima facie PMLA case and proceeds of crime were found.
Issues: (i) Whether the order rejecting discharge suffered from legal error; (ii) Whether the materials collected during investigation disclosed a prima facie case of money laundering against the petitioner.
Issue (i): Whether the order rejecting discharge suffered from legal error.
Analysis: The governing standard at the discharge stage is limited to whether the record and prosecution materials disclose sufficient ground to proceed. Defence material, detailed appreciation of evidence, and a mini trial are impermissible. Revisional interference is warranted only where there is patent illegality or the case is groundless on the face of the prosecution record. The impugned order was a reasoned order based on the complaint, statements, and investigation material.
Conclusion: The rejection of discharge did not suffer from legal error and called for no interference.
Issue (ii): Whether the materials collected during investigation disclosed a prima facie case of money laundering against the petitioner.
Analysis: The materials disclosed that the petitioner allegedly accumulated assets far beyond known salary income, routed cash through multiple bank accounts and insurance policies, and used family accounts to project tainted funds as untainted. The investigation also traced investments in immovable property and seizure of cash, which were treated as proceeds of crime under the PMLA. At this stage, the court was not required to test the defence explanation regarding agricultural income, dairy income, rental income, or the absence of prosecution of the wife in the predicate case. On the prosecution material, the essential ingredients of the offence under the PMLA were found to be present.
Conclusion: A prima facie case of money laundering was made out against the petitioner.
Final Conclusion: The prosecution was held fit to proceed to trial, and the discharge plea was rejected on the basis that the complaint and investigation material disclosed sufficient grounds against the petitioner.
Ratio Decidendi: At the discharge stage, the court must confine itself to the prosecution record and determine only whether there is ground for presuming the accused's involvement; where the materials disclose prima facie proceeds of crime, layering, and projection of tainted assets as untainted, discharge cannot be granted on the basis of defence material.
TaxTMI 
AI Drafter ✕
TaxTMI 
