NEW DELHI: Indiscriminate use of the Prevention of Money Laundering Act by the Enforcement Directorate (ED) will affect the "value" of the legislation and it cannot be wielded as a weapon to put people behind bars, the Supreme Court said on Wednesday.
The apex court's observation came during the hearing on an appeal of a Jharkhand-based company in a money laundering case.
"If you indiscriminately start using ED proceedings then the Act will lose its relevance," the bench comprising Chief Justice N V Ramana and Justices A S Bopanna and Hima Kohli said.
The ED is "diluting the Act", it said.
"Not just this case. If you start using it as weapon against Rs 1,000 (money laundering) case, Rs 100 case, then what will happen. You can't put all people behind bars," it added.
"Such indiscriminate use will affect the value of Act," the bench said.
Steel company Usha Martin Limited has moved the top court against an order of the Jharkhand High Court in a case relating to export of iron ore fines (IOF).
The firm has challenged the ED's summons issued to it in connection with the criminal proceedings before the District Sessions Judge-cum-Special Judge, CBI for offences under the PMLA.
The high court had dismissed the plea on November 3, 2021, leading to the present appeal before the Supreme Court.
The Supreme Court issued notice in the matter and granted protection from coercive action to the appellants.
The plea said the ED proceedings were based on the premise that the company indulged in export of IOF and consequently violated the conditions of lease agreement with the state government.