Abstract

This paper examines one of the most serious tensions in Indian criminal law today: the conflict between the reverse burden of proof under Section 24 of the Prevention of Money Laundering Act, 2002 (PMLA), and the constitutional guarantee of personal liberty under Article 21 of the Constitution of India. The paper argues that while the Supreme Court of India upheld both provisions in Vijay Madanlal Choudhary v. Union of India, (2022), the subsequent period from 2023 to 2025 has seen a visible shift in judicial thinking. Courts have begun to recognise that a mechanical application of the twin conditions for bail under Section 45 PMLA, read together with the statutory presumption under Section 24, can convert the process of prosecution itself into a form of punishment. This outcome directly violates the fundamental right to a speedy trial and to a fair procedure under Article 21.

The paper further argues that the presumption under Section 24 is not self-activating. It does not come into play the moment the Enforcement Directorate files a complaint. The ED must first establish what this paper calls the foundational facts: the existence of a predicate scheduled offence, the derivation of identifiable property from that offence, and a prima facie connection between the accused and the process or activity of laundering. Only after these foundational facts are shown to a court does the burden shift to the accused. This understanding, drawn from a careful reading of the text of the statute and from the evolving case law, is critical for litigation practice.

Keywords: PMLA, Section 24, Section 45, Reverse Burden of Proof, Twin Conditions, Proceeds of Crime, Foundational Facts, Article 21, Presumption of Innocence, Vijay Madanlal Choudhary, Pankaj Bansal, Manish Sisodia

I.  Introduction

The Prevention of Money Laundering Act was enacted in 2002 to give effect to India’s obligations under international conventions on anti-money laundering, particularly those arising from the Financial Action Task Force (FATF) recommendations.[1] In its original form, the Act was primarily directed at drug trafficking proceeds and was closely linked to the Narcotic Drugs and Psychotropic Substances Act, 1985.[2] Over the two decades since its enactment, however, the PMLA has been transformed through successive amendments, particularly in 2005, 2009, and 2012, into a wide-ranging statute that covers offences ranging from corruption and tax evasion to cybercrime and human trafficking.

This transformation has not been neutral in its effect on the accused. Every amendment has either expanded the list of scheduled offences, tightened the conditions for bail, widened the power of attachment, or strengthened the reverse burden of proof. The result is a statute that starts from a presumption of culpability rather than a presumption of innocence. This is a fundamental departure from the principle that has governed criminal law since Woolmington v. Director of Public Prosecutions, [1935] AC 462,[3]where the House of Lords affirmed that it is for the prosecution to prove the guilt of the accused, not for the accused to prove innocence.

In the Indian constitutional context, the presumption of innocence is not an explicit provision of the Constitution, but the Supreme Court has repeatedly held that it is a facet of the right to a fair procedure under Article 21.[4] The right to life and personal liberty cannot be curtailed except by procedure established by law, and that procedure must be fair, just, and reasonable. A procedure that treats the accused as guilty from the beginning of the trial is neither fair nor reasonable. This is the central tension that this paper addresses.

The paper proceeds in six parts. Part II analyses the architecture of Section 24 and Section 45 of the PMLA in detail. Part III examines the 2022 Supreme Court ruling in Vijay Madanlal Choudhary and its reasoning.[5] Part IV traces the evolution of judicial thinking from 2023 to 2025, with particular attention to the decisions in Pankaj Bansal v. Union of India, (2023) 14 SCC pvt, Manish Sisodia v. Directorate of Enforcement, (2024) SCC OnLine SC 1920, and Prem Prakash v. Union of India through ED, (2024) SCC OnLine SC 2693. Part V develops the foundational facts doctrine as a litigation tool. Part VI identifies the constitutional challenges and proposes a proportionality test as a way forward.

[1]Prevention of Money Laundering Act, 2002, No. 15 of 2003, pmbl. (India).

[2] Narcotic Drugs and Psychotropic Substances Act, 1985, No. 61 of 1985 (India).

[3]Woolmington v. Dir. of Pub. Prosecutions, [1935] AC 462, 481 (HL) (Lord Sankey LC

[4]INDIA CONST. art. 21. The Supreme Court read the right to a speedy trial into Article 21 in Hussainara Khatoon v. State of Bihar, (1979) 3 SCC 544, 548 (India).

[5]Vijay Madanlal Choudhary v. Union of India, (2022) SCC OnLine SC 929, 5 (India)