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by sayum
13 June 2026 3:52 PM
"The truthfulness, sufficiency, and acceptability of the Petitioner's manufactured defense can only be tested during a full trial through cross-examination, not at the threshold stage of framing charges," Jharkhand High Court, in a significant ruling, held that a court cannot conduct a "mini-trial" at the stage of framing charges or considering a discharge application in money laundering cases.
A bench of Justice Sujit Narayan Prasad observed that once the prosecution establishes the "foundational facts" of illicit wealth, a mandatory statutory presumption under Section 24 of the PMLA arises, shifting the burden onto the accused to prove that the assets are untainted.
The court made these observations while dismissing a criminal revision petition filed by a retired Forest Range Officer challenging the rejection of his discharge application. The bench noted that the Petitioner had allegedly amassed assets worth over ₹4.04 Crores against a total career salary of approximately ₹49 Lakhs, representing a staggering 608% disproportion.
The Petitioner, Digamber Singh, retired as a Forest Range Officer in 2017. The Anti-Corruption Bureau (ACB), Ranchi, registered an FIR against him in 2016 for amassing disproportionate assets under the Prevention of Corruption Act, 1988. Following the ACB’s charge sheet, the Directorate of Enforcement (ED) recorded an ECIR in 2017, alleging that the Petitioner systematically layered illicit funds through the bank accounts of family members to acquire movable and immovable properties.
The primary question before the court was whether the trial court erred in rejecting the Petitioner's application for discharge under Section 227 Cr.P.C. (Section 250 BNSS). The court was also called upon to determine if the presence of a massive disproportion in assets compared to known income is sufficient to establish a prima facie case of "Proceeds of Crime" under the PMLA.
Court Explains Limited Scope Of Discharge Stage
The Court emphasized that at the stage of considering a discharge application, the trial judge is not expected to go deep into the probative value of the material on record. Referring to the Supreme Court’s decision in State of Tamil Nadu v. N. Suresh Rajan, the bench noted that the court must proceed with the assumption that the materials brought by the prosecution are true.
The bench observed that the main intention of the discharge provision is to assist the court in determining whether there is sufficient ground to proceed, not to arrive at a definite conclusion of guilt or innocence. It held that even strong suspicion founded upon material which leads the court to form a presumptive opinion would justify the framing of a charge.
Foundational Facts Shift Burden Under Section 24 PMLA
Addressing the statutory onus, the High Court held that the prosecution had established a formidable "foundational fact" by showing a 608% disproportion in assets. Justice Prasad noted that once the generation and routing of "Proceeds of Crime" is prima facie established, Section 24 of the PMLA mandates the court to presume that such wealth is involved in money laundering.
The Court rejected the Petitioner's argument that the burden had been unfairly shifted. It held that the Petitioner cannot prematurely discharge this heavy statutory burden in revisional jurisdiction by merely attaching photocopies of unverified income tax returns or departmental clean-chits, as these are matters to be adjudicated during the trial.
Defense Claims Regarding Family Income Are Matters Of Trial
The Petitioner had claimed that a significant portion of the assets belonged to his wife's independent dairy and agricultural business. However, the Court noted that the investigation revealed his wife had no independent, verifiable source of income and had categorized herself as a "housewife" in bank records.
The bench observed that "circular layering" was evident where cash deposited in the wife's accounts was transferred to insurance policies held in the Petitioner's name. It held that such claims of independent family income, which were found to be "chronologically impossible" during investigation, must be tested through cross-examination and cannot be used to seek discharge at the threshold.
PMLA Prosecution Possible Even If Family Not Named In Predicate Offense
Relying on the Apex Court’s ruling in Pavana Dibbur v. Directorate of Enforcement, the High Court clarified that a person need not be an accused in the scheduled (predicate) offense to be prosecuted for money laundering. The fact that the ACB chose not to prosecute the Petitioner’s wife for corruption does not legitimize the "Proceeds of Crime" parked in her accounts.
The Court noted that the PMLA is a standalone offense. The mere fact that the principal scheduled offense (the corruption case) is still pending and has not resulted in an acquittal or closure report means that the ED's proceedings are legally maintainable and do not suffer from any jurisdictional error.
Revisional Court Cannot Undertake Meticulous Examination Of Evidence
In its concluding observations, the Court defined the limits of its revisional power. Citing Munna Devi v. State of Rajasthan, the bench held that revisional jurisdiction should not be exercised in a routine manner to appreciate evidence like an appellate court.
The bench held that interference is called for only to correct patent errors of law or jurisdiction that occasion gross unfairness. Finding no such error in the Special Judge's order, the High Court affirmed that there was sufficient material to proceed with the trial against the retired official for the offense of money laundering.
The High Court dismissed the criminal revision petition, affirming the trial court's order dated January 16, 2026. The Court clarified that its observations were confined to the legality of the discharge rejection and would not influence the independent adjudication of the case on its merits during the trial.
Date of Decision: 10 June 2026
