Case Note & Summary
Background: The matter concerns a bail application filed before the Bombay High Court under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 and Section 45 of the Prevention of Money Laundering Act, 2002. The applicant, Nagani Akram Mohammad Shafi, was in judicial custody since 20 November 2024 in connection with ECIR/MBZO-II/20/2024 registered by the Directorate of Enforcement, Mumbai Zonal Office-II, corresponding to Special Case (PMLA) No. 191 of 2025 for offences punishable under Sections 318(4), 338, and 340(2) of the Bharatiya Nyaya Sanhita, 2023. The prosecution alleged that over ₹100 crore was deposited in fourteen newly opened accounts at Nashik Merchant Co-operative Bank, Malegaon, and the transactions were layered to conceal illicit origin. FIR No. 295 of 2024 was registered on 7 November 2024 under the BNS. The ED registered the ECIR on 11 November 2024 treating the FIR offences as scheduled offences under PMLA and arrested the applicant on 20 November 2024. The Special Court (PMLA), Mumbai rejected the applicant's bail plea on 6 February 2025, after which he approached the High Court. The court framed a substantial question of law: whether references in the PMLA to the Indian Penal Code, 1860 and the Code of Criminal Procedure, 1973 stand vitiated by their repeal through the coming into force of the BNS and BNSS, and whether such references are to be construed as referring to the corresponding provisions of the new enactments. The applicant's counsel argued that the PMLA Schedule does not include BNS offences; inclusion in the Schedule is a legislative policy reserved for Parliament; the notification dated 16 July 2024 cannot alter the Schedule; and the PMLA incorporated IPC offences by way of legislation by incorporation, so repeal of IPC does not extend to PMLA. The respondent contended that Section 8(1) of the General Clauses Act, 1897 directs that references to repealed enactments shall be read as references to re-enacted provisions; the BNS substantially re-enacts the IPC core offences; the PMLA must be interpreted purposively by updating construction; and the notification has force of law as clarificatory. The court heard arguments on the maintainability of the PMLA prosecution based on the repeal issue, but the extracted portion of the judgment ends before the final holding. Therefore, the final decision and operative directions are not mentioned.
Headnote
A) Statutory Interpretation - Repeal and Re-enactment - Reference to Repealed Enactment and General Clauses Act - General Clauses Act, 1897, Section 8(1); Prevention of Money Laundering Act, 2002 - The court was called upon to decide whether references in the PMLA to the IPC and CrPC are vitiated by repeal of those enactments and replaced by corresponding BNS and BNSS provisions. The respondent contended that Section 8(1) General Clauses Act provides that references to repealed enactments shall be construed as references to the re-enacted provisions. The issue required determination of whether the PMLA references survive the repeal by application of that general statutory rule (Paras 1,8). B) Money Laundering - Predicate Offence and Scheduled Offence - Inclusion in PMLA Schedule is Legislative Policy - Prevention of Money Laundering Act, 2002, Section 2(1)(u), Schedule; Bharatiya Nyaya Sanhita, 2023, Sections 318(4), 338, 340(2) - The applicant argued that offences under the BNS are not included in the PMLA Schedule after the repeal of the IPC, and inclusion or exclusion from the Schedule is a matter for Parliament, not executive action. The respondent countered that the BNS carries forward the same core offences as the IPC in substance, and the PMLA Schedule must be read purposively to include corresponding BNS offences to avoid a break in anti-money laundering law (Paras 5-6,9-10). C) Statutory Interpretation - Legislation by Reference versus Incorporation - Distinction and Effect of Subsequent Amendments - General Clauses Act, 1897; Prevention of Money Laundering Act, 2002 - The applicant relied on Mahindra & Mahindra Ltd. v. Union of India and Insolvency and Bankruptcy Board of India v. Satyanarayan Bankatlal Malu to argue that the PMLA incorporated IPC offences as they existed at enactment, so later repeal by BNS would not automatically extend to PMLA. The respondent rejected that view, urging an updating construction under Section 8(1) General Clauses Act to avoid freezing the PMLA in time (Paras 7,9). D) Constitutional Law - Executive Power - Notification under General Clauses Act and Legal Force - General Clauses Act, 1897, Section 8(1); Constitution of India - The notification dated 16 July 2024 issued by the Ministry of Law and Justice clarified that references to IPC, CrPC, and Indian Evidence Act in existing laws shall be read as references to BNS, BNSS, and corresponding new Evidence Act. The applicant challenged it as ineffective to alter the PMLA, while the respondent argued it derives authority from the General Clauses Act and the executive's duty to faithfully execute legislation, citing Rai Sahib Ram Jawaya Kapur v. State of Punjab (Para 11).
Issue of Consideration
Whether references in the Prevention of Money Laundering Act, 2002 to provisions of the Indian Penal Code, 1860 and the Code of Criminal Procedure, 1973 stand vitiated or rendered ineffective by their repeal through the coming into force of the Bharatiya Nyaya Sanhita, 2023 and Bharatiya Nagarik Suraksha Sanhita, 2023, and whether such references are to be construed as referring to corresponding provisions of the new enactments.
Law Points
- Section 8(1) General Clauses Act
- 1897
- reference to repealed enactments
- legislation by reference versus incorporation
- updating construction
- scheduled offence under PMLA
- inclusion in Schedule is legislative policy
- executive notification under General Clauses Act
- corresponding provisions of BNS and BNSS
