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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
AMIT BORKAR, J.
Nagani Akram Mohammad Shafi - Applicant
Versus
The Union of India, Through Assistant Director, Directorate of Enforcement and Anr. – Respondents
Bail Application No.728 of 2025
Decided On : 08-07-2025
| Table of Content |
|---|
| 1. bail application context and applicant's detention. (Para 1 , 2 , 3 , 4) |
| 2. applicant claims pmla applicability issues. (Para 5 , 6 , 7) |
| 3. prosecution argues continuity in law post-bns. (Para 8 , 9 , 10 , 11) |
| 4. requirements for establishing predicate offences under pmla. (Para 12 , 13 , 14 , 15 , 16) |
| 5. re-enactment affects interpretation of legal references. (Para 17 , 18 , 19 , 20) |
| 6. legislation by reference vs. incorporation distinction. (Para 21 , 22 , 23 , 24 , 25) |
| 7. implications of section 8 on legislative continuity. (Para 26 , 27 , 28 , 29 , 30) |
| 8. court's reasoning supporting dynamic interpretation of pmla. (Para 31 , 32 , 33 , 34 , 35) |
| 9. legislation by reference and its operational dynamics. (Para 36 , 37 , 38 , 39 , 40) |
| 10. continuity of ipc references within pmla post-amendments. (Para 41 , 42 , 43) |
| 11. legislative intent relevant for interpreting pmla. (Para 44 , 45 , 46 , 47) |
| 12. validity of ipc references not negated by absence of text amendment. (Para 48 , 49 , 50) |
| 13. avoiding absurd outcomes in legal interpretations. (Para 51 , 52 , 53) |
| 14. purpose-driven interpretation of anti-money laundering laws. (Para 54 , 55 , 56 , 57) |
| 15. role of executive notifications and their legal validity. (Para 58 , 59 , 60) |
| 16. limits of executive power in law interpretation. (Para 61 , 62 , 63) |
| 17. notification lacks force of law under article 13. (Para 64 , 65 , 66 , 67) |
| 18. court's conclusions regarding notification's legal status. (Para 68 , 69) |
| 19. bns provisions seen as valid under pmla. (Para 70) |
| 20. rejection of bail application. (Para 71 , 72) |
JUDGMENT :
AMIT BORKAR, J.
1. The present bail application involves a substantial question of law, which, though uncommon in the context of bail proceedings, assumes considerable importance for the proper adjudication of the present case. The core issue that arises for consideration is whether the references made in the Prevention of Money Laundering Act, 2002 (hereinafter referred to as ‘PMLA’), to the provisions of the INDIAN PENAL CODE , 1860 (IPC) and the Code of Criminal Procedure, 1973 (CrPC), stand vitiated or rendered ineffective by virtue of the repeal of those enactments through the coming into force of the Bharatiya Nyaya Sanhita, 2023 ( BNS ) and the Bharatiya Nagarik Suraksha Sanhita, 2023 ( BNS S ). A further question that necessarily follows is whether such references in the PMLA are now to be construed as referring to the corresponding provisions under the new legislative regime embodied in the BNS and BNS S .
2. By this application filed under Section 483 of the BNS S and Section 45 of the PMLA, the applicant seeks regular bail in connection with ECIR/MBZO-II/20/2024 registered by the Directorate of Enforcement, Mumbai Zonal Office-II. The said ECIR corresponds to Special Case (PMLA) No. 191 of 2025, concerning offences punishable under Sections 318 (4), 338, and 340(2) of the BNS , the new penal code which has replaced the IPC. The applicant has been in custody since 20th November 2024 in relation to this case.
3. The prosecution case, in brief, is that during the period in question a huge amount of over Rs.100 crore was deposited in fourteen newly opened accounts at the Nashik Merchant Co- operative Bank, Malegaon, District Nashik. These transactions were allegedly layered and routed in a manner to conceal their illicit origin, giving rise to suspicion of money laundering. FIR No. 295 of 2024 was registered on 7th November 2024 at the local police station for offences under the BNS . On 11th November 2024, the Enforcement Directorate registered the above ECIR, treating the offences disclosed in the FIR as scheduled offences under the PMLA, and commenced investigation under the PMLA. The applicant was arrested on 20th November 2024 in connection with the money laundering probe.
4. The applicant had earlier moved an application for bail before the Special Court (PMLA), Mumbai. However, by an order dated 6th February 2025, the Special Court rejected that bail p
The Prevention of Money Laundering Act's references to IPC provisions remain valid and dynamically interpretative, applying to corresponding sections of the Bharatiya Nyaya Sanhita after repeal.
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Proceedings under the Prevention of Money Laundering Act are independent and can be based on continuing laundering activities, regardless of the scheduled offence's date of commission.
(1) Bail – Twin conditions in Section 45(1) of 2002 Act, which was declared unconstitutional by judgment of Apex Court in Nikesh T. Shah Vs. Union of India (2018) 11 SCC 1, stand revived in view of L....
Money-laundering is a continuing offence, so long as tainted property is enjoyed, possessed, orprojected as untainted.
The provision requiring an accused to be heard before cognisance is a mandatory, substantive right. Cognisance orders passed without such a hearing are void ab initio, and ministerial registration of....
Offences punishable under Insolvency and Bankruptcy Code, 2016 having imprisonment of two years or more will have to be tried by a Special Court presided by a Sessions Judge or an Additional Sessions....
The court affirmed that under Section 44(1)(c) of the PMLA, the Special Court is designated to try both scheduled offences and money laundering offences, emphasizing legislative intent for discretion....
The requirement to provide an accused an opportunity to be heard before taking cognizance of an offence is a mandatory, substantive right. This procedural mandate applies to all cognizance orders pas....
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