LI Network
Published on: 27 August 2023 at 16:27 IST
The Telangana High Court has underscored that the phrase ‘reason to believe’ mentioned in the Prevention of Money Laundering Act, 2002 cannot be mere suspicion, gossip, or rumor.
In a recent judgment, Justice M. Laxman emphasized that for an offense of money laundering to be established, the Enforcement Directorate (ED) needs to provide a reasonable basis to believe that the crime has occurred and that the proceeds, whether direct or indirect, can be linked to criminal activity related to the offense.
The court’s ruling came while upholding the conviction of a man accused of attempting to rape a seven-year-old girl in 2006 and confining her to a room.
Justice M. Laxman stressed that to arrive at the conclusion of ‘reason to believe,’ there must be substantive material suggesting the formation of this conclusion, which should be based on sufficient evidence rather than mere suspicion.
The case had initially involved an FIR filed by the Economic Offences Wing of Bhopal in 2019, alleging unauthorized access to an e-tender procurement portal, leading to tampering with tenders and generating undue benefits for specific companies.
The Enforcement Directorate (ED) subsequently initiated an investigation and suspected crime proceeds of up to 80 thousand crores. However, the accused claimed that no crime proceeds had materialized, and those previously charged in the case were acquitted.
Justice M. Laxman highlighted the significance of credible evidence in establishing ‘reason to believe’ and stressed that mere suspicion cannot be the basis for such a conclusion.
The Court found that there was no evidence of tampering to support the ED’s claim of crime proceeds. Consequently, the Court quashed the ECIR (Enforcement Case Information Report) against the accused.