Without going deeper into the matter of Rhea Chakraborty’s involvement in this case, let us jump directly to the legal aspects of this case. For this purpose, we need to first get a brief understanding of the facts of this case. On July 25, 2020, Sushant Singh Rajput’s father K.K. Singh filed an FIR in Patna , accusing Rhea and her family of abetment to suicide, fraud and holding Sushant hostage. After this, the ‘Enforcement Directorate’ (ED) on July 31 registered a money laundering case against Rhea and her family members. The case is about “Suspicious transactions” worth Rs 15 crore which were allegedly taken from the late actor’s account.
What does the Prevention of Money Laundering Act 2002 say?
Money Laundering, as per Section 3 of Prevention of Money Laundering Act (PMLA), the offence of ‘Money Laundering’ is constituted when a person attempts to indulge in or assists in any manner in any activity related to the proceeds of a crime. The involvement may be directly or indirectly and knowingly or unknowingly. The activities related to proceeds of crime include concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering.
‘Proceeds of Crime’, Section 2 (u), refers to any property derived or obtained as a result of criminal activity relating to a scheduled offence or the value of any such property.
It thus covers transactions effectuated with the ulterior motives of avoiding detection and making profits contrary to legal means. Under this act, the person who has benefited through such transactions will be questioned.
The peculiar nature of this Act is that presumption of guilt exists and the burden of proof lies upon the accused person. This means, the accused person has to provide proof of innocence to be discharged of any liability arising from this Act. Thereby, Rhea will be required to furnish all the necessary information about the transactions she has made to prove her innocence.
Since the alleged offenses against Rhea are criminal offenses, recognized under the IPC, any benefit that she might have derived from the late actor’s assets would be treated as ‘Proceeds of Crime’ as such offenses are ‘Scheduled offenses’ under the Act. If proved, then the transactions made by Rhea from Sushanth’s account would constitute the offence of money laundering without the requirement of mens rea or intention to commit the offense.
Powers and role of the Enforcement Directorate under PML Act, 2002.
The investigation of offences of money laundering under the PMLA and the performing of actions like attachment of property are vested with the ‘Enforcement Directorate’ (ED). It is also tasked with carrying out the prosecution of the accused persons. The ED derives its authority from an order dated 1st July 2005 of the Central Government and Section 13 and Section 19 of the Act.
ED consists of “Director”, “Additional Director” or “Joint Director” or “Deputy Director” or “Assistant Director” as appointed by the Central Government under Section 45 of the Act. It is interesting to note that the ED is a body which is under the administrative control of the Department of Revenue, Ministry of Finance and government of India for operational purposes.
Bail and Punishment
The offences under the PMLA are cognizable and non-bailable under Section 45 of the PMLA. This means that the accused person cannot claim bail as a matter of right and that would depend upon the discretion of the court.
Punishment ranges to rigorous imprisonment for maximum three years, that may be extended to seven years. A fine can also be levied as part of the punishment.
Are the suicide case and money laundering case being heard together?
The 2013 amendment to the act clarified that the trial for predicate offense, which is an alleged offense inextricably linked to money laundering will be conducted by the Special Court itself upon completion of investigation. Therefore, the investigative authorities for the predicate offence are mandated to assist the Special Court for the prosecution of the predicate offense.
However, in the present case, it is not so. The suicide case and money laundering case have to be decided separately.
The PMLA proceedings are designed for speedy disposal of the cases. Therefore, we might soon get to know if Rhea took undue advantage of her relationship with Sushanth for monetary gains or not. As of now she has not been arrested under PMLA but has only been summoned for questioning.
(Faiza Khanum is a final year law student from ULC, Bangalore.)