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Supreme Court cautions against ‘indiscriminate’ use of money laundering law

The bench headed by Chief Justice of India N V Ramana observed that rampant use of Prevention of Money Laundering Act, 2002 will lead to a situation in which the law will lose “relevance”. Instead, the Act should be used “reasonably”, it said.

The comments by the bench, also comprising Justice Hima Kohli, came on a day it took up for hearing two cases in which the accused were booked under PMLA.

The Supreme Court on Wednesday cautioned against slapping the anti-money laundering law “indiscriminately” and said it cannot be used as a “weapon” to put people behind the bars.

The bench headed by Chief Justice of India N V Ramana observed that rampant use of Prevention of Money Laundering Act, 2002 will lead to a situation in which the law will lose “relevance”. Instead, the Act should be used “reasonably”, it said.

“You are diluting the Act. Not just this case. If you start using it as a weapon against 10,000 rupee-case and 100 rupee-case, what will happen? You can’t put all the people behind bars. You have to use it reasonably,” CJI Ramana told Additional Solicitor General S V Raju, appearing for the Central Bureau of Investigation (CBI) in a petition linked to a money laundering case. “If you start indiscriminately using Enforcement Directorate proceedings, then this is what happens. The Act will lose its relevance,” said Justice AS Bopanna.

The comments by the bench, also comprising Justice Hima Kohli, came on a day it took up for hearing two cases in which the accused were booked under PMLA. The first was a Special Leave Petition filed by the CBI, challenging the Telangana High Court’s order granting anticipatory bail to businessman Narender Kumar Patel. Patel was arrested by the Enforcement Directorate (ED) in January 2021 on PMLA charges in connection with a bank fraud case. The top court on Wednesday issued notice to CBI in the matter.

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The second was a Special Leave Petition by Usha Martin Ltd, which has challenged a Jharkhand High Court order that denied the steel company any relief over summons issued in a PMLA case.

Issuing the notice to the central government, the top court bench granted the petitioner protection from arrest and also stayed implementation of the summons dated May 20, 2021.

First published on: 16-12-2021 at 04:11:52 am
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