Property Law Case: Dawa Tasi Lama vs. GoN, NKP, D.N. 9499
Case : Money Laundering Case
Plaintiff : Government of Nepal, represented by Investigation Officer Ravi Raj Kafle on behalf of the Department of Money Laundering Investigation
Defendant : Dawa Tasi Lama
Decision Number : 9499
This case is related to money laundering, illegal possession of foreign currency
Facts of the Case
This case arose after a large amount of foreign currency was recovered from the possession of the defendant, Dawa Tasi Lama. On 2069/07/10 B.S., while the defendant was travelling from Kathmandu to Delhi on Spice Jet Flight No. SG042, airport authorities searched his suitcase and recovered Euro 195,000 from it. The value of the recovered amount was approximately NPR 21,855,600. The key of suitcase was also found in the defendant’s possession.
During investigation, the defendant stated that money did not belong to him but to a Chinese citizen named “Angjing.” According to the defendant, the Chinese citizen had asked him to deliver the suitcase to a person named Lakpa Lama in Delhi, and in return he would receive a 10% commission. However, the defendant failed to provide the full identity, address, or presence of the alleged Chinese citizen.
Before the court, the defendant claimed that he was only a small-scale herbal trader, did not have financial capacity to deal with such a huge amount of money, and was unaware that the suitcase contained foreign currency. Nevertheless, the court held that since the money was recovered from the defendant’s possession, the key was with him, and he failed to disclose the lawful source of the money, the legal responsibility remained upon him.
Therefore, because the defendant could not prove the legitimate source of the recovered money, proceedings were initiated against him under the Money Laundering Prevention Act, 2064.
Legal Issues
- Whether possession of a large amount of money without proving its lawful source amounts to the offence of money laundering.
- Whether initiating a separate case under the Money Laundering Prevention Act, after a case had already been filed under the Foreign Exchange Regulation Act, amounted to double punishment for the same offence.
- Whether the defendant could escape liability merely by claiming that the money belonged to another person.
Decision of Different Courts
Special Court:
The Special Court, Kathmandu, held that the fact that Euro 195,000 was recovered from the possession of the defendant was fully established. Court found that the money was under the defendant’s control, the suitcase key was with him, and he failed to disclose the lawful source of the money. On this basis, the court concluded that the defendant had committed the offence of money laundering under Sections 3, 4(g), and 28 of the Money Laundering Prevention Act, 2064. Accordingly, the court sentenced the defendant to two years imprisonment and imposed a fine equal to the amount involved, i.e., NPR 21,855,600.
The court further stated that merely claiming that the money belonged to someone else was not sufficient to avoid liability, and that the burden of proving the lawful source of the property lay upon the defendant himself.
Supreme Court:
The defendant appealed against the judgment of the Special Court before the Supreme Court. He argued that he was a person of weak financial condition and could not possibly own such a huge amount of money. He further argued that filing both a foreign exchange case and a money laundering case based on the same incident amounted to double jeopardy. However, the Supreme Court upheld the decision of the Special Court. The Court held that the money was recovered directly from the defendant’s possession, he failed to prove the lawful source of the money, and he could not establish the identity or existence of the alleged Chinese citizen.
The Supreme Court further clarified that offences relating to illegal foreign exchange and money laundering are separate and distinct offences. According to the Court, possession of foreign currency without authorization is one offence, while possession of an unusually large amount of money without proving its lawful source is another independent offence.
Therefore, the Court concluded that this was not a case of double punishment for the same offence and dismissed the defendant’s appeal.
Principle Established
- This case established an important legal principle that when a person possesses property or money that is disproportionate to his known income or financial condition, the burden of proving the lawful source of such property lies upon that person himself.
- The Court also clarified that merely claiming that the money belongs to another person is not sufficient unless supported by reliable evidence.
- Further, the case established that offences under the Foreign Exchange Regulation Act and offences under the Money Laundering Prevention Act are separate offences. Therefore, separate legal proceedings can be initiated under different laws arising out of the same incident.
