Jharkhand High Court: Discharge denied in PMLA case against forest officer for disproportionate assets

The Jharkhand High Court, in Digmber Singh @ Digamber Singh Vs Directorate of Enforcement, examined a challenge to an order refusing discharge in a money laundering prosecution under the Prevention of Money Laundering Act, 2002 (PMLA). The Court ultimately sustained the Special PMLA Court’s decision to proceed with trial, holding that there existed sufficient prima facie material to continue the prosecution and that the presumption under Section 24 PMLA was rightly attracted at this stage.

This decision is significant for ongoing PMLA proceedings, particularly those based on disproportionate assets cases under the Prevention of Corruption Act, 1988, and clarifies how courts should approach discharge applications where “proceeds of crime” are derived from alleged corruption by public servants.

Background and procedural history

Service details and allegations of disproportionate assets

  • The petitioner, Digmber Singh @ Digamber Singh, was a government servant in the Forest Department, Government of Jharkhand.
  • He joined service as a Forest Guard in 1978 and superannuated as a Forest Range Officer on 31.12.2017.
  • For most of his career, he was posted in the afforestation wings at Hazaribagh, Giridih and Koderma, exercising considerable administrative and financial control over plantation activities and related public expenditure.

According to the Anti-Corruption Bureau (ACB), Ranchi, during this long tenure the petitioner allegedly abused his official position to build assets vastly exceeding his lawful income.

FIR and charge sheet in the predicate (scheduled) offence

  1. An FIR bearing No. 49/2016 dated 14.06.2016 was registered by ACB, Ranchi, under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act, 1988.
  2. Following investigation, ACB filed Charge Sheet No. 75/2016 dated 10.11.2016 against the petitioner under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act, 1988.
  3. As per that charge sheet:
    • Total gross salary received by the petitioner from March 1978 to June 2016 was Rs. 57,12,468/-.
    • Net salary in hand was approximately Rs. 49,05,652/-.
    • Properties detected in the name of the petitioner and his family members were valued at Rs. 4,04,64,404/-.
    • The difference (treated as unexplained disproportionate assets) was quantified at Rs. 3,47,51,936/-, representing about 608% of his salary income.
    • Bank accounts used were frozen by the Anti-Corruption Bureau.

The scheduled offence under Section 13(2) read with Section 13(1)(e) is listed in Part A of the Schedule to the PMLA, therefore attracting the provisions of that Act.

Initiation of PMLA proceedings

On the basis of the above vigilance FIR and charge sheet, the Directorate of Enforcement (ED):

  • Recorded ECIR/RNSZO/01/2017 dated 25.08.2017.
  • Subsequently registered ECIR Case No. 09 of 2023 against the petitioner for the offence under Section 3 PMLA, punishable under Section 4, invoking Section 44 read with Section 45 of the PMLA.

ED’s investigation under PMLA traced and classified the alleged “proceeds of crime” as follows:

  • Total properties in the name of the petitioner and his family members: Rs. 4,04,64,404/-.
  • Movable assets: about Rs. 2,71,47,407/-, including:
    • Multiple bank accounts and recurring deposits,
    • High-value life insurance policies,
    • Substantial investments in Sahara Credit Co-operative Society.
  • Immovable property: including a high-value residential house “Ashirwaad” at Saketpuri, Hazaribagh, valued at Rs. 80,71,812/- by the Building Division, Hazaribagh.
  • Cash seizure: Rs. 31,50,040/- seized by ACB on 25.07.2016 from the private residence of the petitioner, along with vehicles and household articles valued at Rs. 20,95,145/-.

ED alleged that the unexplained component of Rs. 3,47,51,936/- was squarely covered by the definition of “proceeds of crime” under Section 2(1)(u) PMLA and that the petitioner engaged in money laundering by placing, layering and integrating these funds in the financial system and real estate, projecting them as clean funds.

Discharge application before Special PMLA Court

The petitioner moved Miscellaneous Criminal Application No. 1084 of 2025 before the Special Judge, PMLA, Ranchi, seeking discharge under:

  • Section 227 of the Code of Criminal Procedure, 1973 (Cr.P.C.), and
  • The corresponding provision Section 250 of the **Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS)`.

By order dated 16.01.2026, the Special Judge rejected the discharge plea, holding that there was adequate material to frame charges for the PMLA offence.

The petitioner then approached the Jharkhand High Court by way of Criminal Revision No. 281 of 2026, assailing this refusal to discharge.

Petitioner’s contentions before the High Court

Counsel for the petitioner raised several legal and factual grounds challenging the Special Court’s order:

1. Proceeds of crime not properly identified

  • It was argued that the Special Court had erroneously treated Rs. 3,47,51,936/- as “proceeds of crime” without first pinpointing any specific property actually “derived or obtained” from criminal activity related to the scheduled offence, as required by Section 2(1)(u) PMLA.
  • According to the petitioner, merely calculating an arithmetical difference between assets and known income is not sufficient to attract the definition of “proceeds of crime” without clear linkage to criminal activity.

2.