Prevention of Money Laundering Act 2002 Section 24: Burden of Proof (2026)
What Section 24 of the Prevention of Money Laundering Act, 2002 does: it shifts the burden of proof onto the accused, so that once a person is charged under Section 3, the court presumes the proceeds of crime are involved in money laundering unless the person proves otherwise. Last verified October 2026.
Explainer · Criminal Law · PMLA
Section 24 of the Prevention of Money Laundering Act, 2002 (PMLA) turns the normal rule of criminal law on its head. In an ordinary case, the prosecution must prove guilt. Under Section 24, once a person is charged with the offence of money laundering under Section 3, the court presumes that the proceeds of crime are involved in money laundering, unless the person proves the contrary. This is called a reverse burden, and it makes a PMLA defence harder than a normal criminal defence. This explainer sets out exactly what the section says, how the burden shifts, and how the Supreme Court has upheld it. Last verified October 2026.
- What it is: Section 24 reverses the burden of proof in money laundering cases.
- The rule: once charged under Section 3, the court presumes the proceeds of crime are involved in money laundering unless you prove otherwise.
- Rebuttable: the presumption can be defeated by showing a lawful source for the property, on the balance of probabilities.
- Upheld: the Supreme Court upheld Section 24 in Vijay Madanlal Choudhary (2022).
01The short point
The usual rule is that a person is innocent until proven guilty, and the prosecution carries the burden. Section 24 changes that for money laundering. Once the person is charged under Section 3, the law presumes that the proceeds of crime are involved in money laundering, and it is for the accused to show that they are not.
This is a shifted or reverse burden. It does not remove the need for the ED to lay a foundation, but once that foundation is laid and the charge is framed, the weight moves to the accused to explain the property.
02What Section 24 says
Section 24 has two parts:
- Where a person is charged with the Section 3 offence: the authority or court shall presume, unless the contrary is proved, that the proceeds of crime are involved in money laundering.
- In any other proceeding under the Act: the authority or court may presume that the proceeds of crime are involved in money laundering.
The idea in one line
Once you are charged under Section 3, the law assumes the money is dirty, and you have to prove it is clean.
The difference between the two parts matters. In the charged case, the presumption is mandatory. In other proceedings, it is discretionary.
03How the burden shifts
The burden does not shift out of thin air. The ED must still establish the groundwork: that there is a scheduled offence, that there are proceeds of crime, and that the person is connected to them, enough for a charge under Section 3.
Once that charge is framed, Section 24 operates. The presumption is that the proceeds are involved in money laundering, and the accused must lead evidence to rebut it, for example by showing a lawful source for the property. The standard the accused has to meet is to prove the contrary, which courts read in line with the preponderance of probabilities that applies to a defence, rather than proof beyond reasonable doubt.
04Why it matters
The reverse burden shapes the whole defence. It means that staying silent is risky, because a failure to explain the property can lead the court to treat the presumption as unrebutted. It also means that documents showing the lawful source of funds, income, loans, inheritance and the like, become central to the defence.
It sits alongside the other hard features of the Act, such as the strict bail test in Section 45 and the admissibility of statements recorded under Section 50. Together they make PMLA proceedings tougher on the accused than an ordinary criminal trial.
05Key case law
- Vijay Madanlal Choudhary v. Union of India (Supreme Court, 2022): the court upheld the reverse burden in Section 24. It held that the presumption is not arbitrary because it operates only after a foundation has been laid and the person is charged, and it is rebuttable by the accused.
- Rebuttable presumption: courts have stressed that Section 24 creates a rebuttable presumption, not a conclusive one. The accused can discharge the burden by showing a legitimate source for the property.
So Section 24 is a strong tool for the prosecution, but it is not the last word; a well supported explanation can defeat it.
06A practical note
If Section 24 is in play, the defence usually turns on evidence of source:
- Build the source story early. Collect proof of lawful income, loans, gifts and inheritance for the property in question.
- Test the foundation. The presumption only operates if the person is properly charged under Section 3, so the existence of proceeds of crime and a scheduled offence can still be challenged.
- Remember it is rebuttable. The burden can be discharged on the balance of probabilities, not beyond reasonable doubt.
For how Section 24 fits with the rest of a PMLA case, see how a PMLA case works in practice. This explainer is general information, not legal advice.
07Where Claw fits
Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.
Winning on Section 24 usually means showing how courts have let an accused rebut the presumption on facts like yours. Claw lets you search more than 30 crore judgments on Section 24 and the reverse burden, with Supreme Court rulings from 1950 and High Court rulings from 1990, and results in under 5 seconds, so you can find how a lawful-source defence has succeeded or failed. You can also track a live PMLA trial, with its orders and hearings, by party or advocate name across 9,102 courts, benches and forums.
Your case papers are never used to train the AI models behind Claw. Create a free Claw account to research Section 24 rulings and track a pending matter, and use case search across Indian courts for the wider law.
08Sources and further reading
- India Code (official text of the PMLA, 2002): indiacode.nic.in
- Enforcement Directorate (official): enforcementdirectorate.gov.in
- PRS Legislative Research (PMLA background): prsindia.org
- Claw: clawlaw.in
This explainer is general information, not legal advice. PMLA law is fast moving, so check the current provisions and the latest rulings, and take advice from counsel before you act.
09Frequently asked questions
What does Section 24 of the PMLA do?
Section 24 shifts the burden of proof. Once a person is charged with the offence under Section 3, the court presumes that the proceeds of crime are involved in money laundering, unless the person proves the contrary.
Does Section 24 remove the presumption of innocence?
It qualifies it for money laundering cases. The presumption operates only after a foundation is laid and the person is charged under Section 3, and it is rebuttable, so the accused can still disprove it.
What standard must the accused meet to rebut the presumption?
Courts read the burden as one to be discharged on the balance of probabilities, the standard that applies to a defence, not proof beyond reasonable doubt, which is the prosecution standard.
Is the Section 24 presumption always mandatory?
Where the person is charged with the Section 3 offence, the court shall presume, so it is mandatory. In any other proceeding under the Act, the court may presume, so there it is discretionary.
Has Section 24 been upheld by the courts?
Yes. In Vijay Madanlal Choudhary (2022) the Supreme Court upheld the reverse burden in Section 24, holding that it is not arbitrary because it operates only after a charge and is rebuttable.
Can I research Section 24 cases in Claw?
Yes. Claw lets you search more than 30 crore judgments on Section 24 and the reverse burden, in under 5 seconds, and track a live PMLA trial by party or advocate across 9,102 courts, benches and forums. It researches and tracks the matter but does not give legal advice.