Mere negligence is not sufficient. Intent is essential to constitute an offense under Section 3 of the PMLA. In the absence of prima facie material to substantiate that the third party person knowingly facilitated the transfer of proceeds of the crime, no presumption can be drawn that such person was involved in money laundering as stated under Section 24. The burden is on the prosecution to prove otherwise
The essential elements to constitute an offence under Section 3 of the Prevention of Money Laundering Act, 2002 are as follows:
a) Proceeds of crime: Involvement with the property derived from criminal activity.
b) Directly or indirectly engaging: Participation in concealing, transferring or removing the proceeds of the crime.
c) Knowledge or reason to believe: The accused must have knowledge or reason to believe that the property involved is derived from a criminal activity related to a scheduled offence.
d) Criminal activity: The offence under Section 3 of the PMLA is linked to the scheduled offences
listed in the act.
e) Intent: There should be intention on the part of the accused to project the proceeds of the crime
as untainted money.
These elements form a basis to prosecute a person under Section 3 of the PMLA.
In the case of a third party like a payment gateway, there should be evidence to show that the accused had knowledge that the funds transferred to the merchant IDs of the culprits were derived from criminal activity related to a scheduled offence, or that they knowingly assist in concealing or
transferring illicit proceeds as clean money.
Mere negligence is not sufficient. Intent is essential to constitute an offense under Section 3 of the PMLA. In the absence of prima facie material to substantiate that the third party person knowingly facilitated the transfer of proceeds of the crime, no presumption can be drawn that such person was involved in money laundering as stated under Section 24. The burden is on the prosecution to prove otherwise.