BOMBAY HIGH COURT
Amit Borkar, J.
Nagani Akram Mohammad Shafi – Applicant
versus
Union of India Through Assistant Director and Anr. – Respondents
Bail Application No.728 of 2025
Decided on 8.7.2025

IMPORTANT POINTS
(1) Offences under Bharatiya Nyaya Sanhita, 2023 which correspond to offences listed in PMLA Schedule, as erstwhile IPC provisions, are to be regarded as scheduled offences for the purposes of PMLA, 2002 – Absence of textual amendment of Schedule does not disable prosecution so long as new law covers same field of criminality.
(2) Notification issued by Central Government dated 16th July 2024, seeking to substitute references to IPC with BNS by invoking Section 8 of General Clauses Act and Article 73, does not amount to “law” within meaning of Article 13 of Constitution of India – Absence of authentication under Article 77 further deprives said notification of any legal effect.
(3) Section 8 of General Clauses Act, 1897 is merely a tool of interpretation, not a source of legislative or executive power.
(4) Article 73 does not authorise executive to alter legislative references or create binding legal norms without legislative sanction.

Headnote:

(A) Prevention of Money Laundering Act, 2002 – Section 45 – Bharatiya Nagarik Suraksha Sanhita, 2023 – Section 483 – General Clauses Act, 1897 – Section 8(1) – Bail application – PMLA is directly connected to and dependent upon specific offences listed in Schedule – Without predicate offence, offence of money laundering under Section 3 of PMLA cannot be independently sustained – There is exact legal link between PMLA and serious crimes mentioned in Indian Penal Code – Where there is mere reference to or citation of one enactment in another without incorporation – Section 8(1) applies and repeal and re-enactment of provision referred to or cited has effect set out in that section and reference to provision repealed is required to be construed as reference to provision as re-enacted – References to IPC offences in its Schedule are dynamic and must be interpreted in light of current law in force, which is now Bharatiya Nyaya Sanhita, 2023, replacing IPC – Nature of reference in PMLA is such that repeal and substitution of IPC by BNS does not disrupt or invalidate operation of Schedule – Offences that were earlier specified by their IPC section numbers must now be read as referring to their corresponding provisions in BNS, by applying Section 8 of General Clauses Act, 1897 – PMLA Schedule continues to remain operational and meaningful, even after IPC has been repealed, because legal mechanism of legislation by reference ensures continuity by treating references as living and dynamic, not static or frozen in time. (Paras 14, 16, 17, 23 and 34)

(B) Prevention of Money Laundering Act, 2002 – Section 45 – Bharatiya Nagarik Suraksha Sanhita, 2023 – Section 483 – General Clauses Act, 1897 – Section 8(1) – Bail application – Even if IPC has been repealed and replaced, references in PMLA to IPC sections must now be interpreted as referring to corresponding Sections in BNS, so long as substance of offence remains same – Even if new enactment has a different structure or numbering, what matters is substance and continuity of offence – If same offence is now found under a different section number in re-enacted law, then that new section is to be read in place of old one in all laws which referred to it, including special Acts like PMLA – References to IPC offences in Schedule to PMLA must now be read as references to the corresponding offences under the Bharatiya Nyaya Sanhita, 2023, including Section 318(4) of BNS in place of Section 420 of IPC, since both provisions deal with same offence of cheating in substance – This approach preserves legislative intent, upholds rule of law, and ensures that enforcement of PMLA continues without interruption or ambiguity – References to IPC offences must now be read as referring to corresponding provisions under BNS, in order to maintain legal continuity and prevent any disruption in enforcement of PMLA – If enforcement of PMLA is disrupted just because IPC has been replaced with a new code, entire mechanism would come to a halt, and offenders would escape liability due to a technicality – That is clearly not what Parliament intended. (Paras 42, 43, 44, 51 and 55)

(C) General Clauses Act, 1897 – Section 8(1) – Legislation by Reference and Legislation by Incorporation – Legislation by Reference occurs when a statute refers to provisions of another existing statute without physically reproducing them within its own text – In such cases, referred provisions are considered part of referring statute, but they maintain their independent existence – A key characteristic of this doctrine is its dynamic nature: any subsequent amendments, modifications, or even repeal of referred statute will directly affect referring statute – Conversely, Legislation by Incorporation involves physical “bodily lifting” of provisions from one enactment and making them an integral, fixed part of another – Once incorporated, these provisions become a static component of incorporating statute, as if they were originally enacted within it – Consequently, subsequent amendments or repeal of original statute from which provisions were drawn do not affect incorporated provisions, as they have lost their independent existence within context of incorporating statute – Effect of incorporation means that repeal of former leaves the latter wholly untouched – Main legal difference between legislation by reference and legislation by incorporation is seen when original law, which is referred to or incorporated, gets changed later – In case of legislation by reference, law that makes reference keeps getting automatically updated, so it always stays in line with latest version of referred law – But in legislation by incorporation, law only takes a fixed version, like a snapshot, of other law at the time was incorporated – That fixed version does not change, even if original law is changed or repealed later – While distinction between “legislation by incorporation” and “legislation by reference” is a well-recognized principle of statutory interpretation, its application is not absolute and must be viewed in context of legislative intent and nature of repealing and re-enacting statutes – Legislative intent behind BNS, BNSS, and BSA is to overhaul and consolidate criminal laws, largely retaining substance of repealed Codes while updating language and addressing new forms of crime – This is a wholesale legislative overhaul, not a selective incorporation of specific provisions. (Paras 24, 25, 26, 30 and 35)

(D) Interpretation of Statute – Rule of Harmonious Construction – Court must avoid any construction of a statute that leads to absurd, anomalous, or unjust consequences, especially when a sensible, lawful, and purposive interpretation is available – Laws must be interpreted to give effect to their purpose and not in a manner that frustrates their operation – Where two interpretations are possible, one which leads to absurdity and other which leads to a just, fair, and sensible result, latter must be preferred. (Para 56)

(E) Constitution of India – Articles 73, 77 and 13 – Separation of Powers – Executive power is not law-making power and cannot be used as a substitute for legislative action – Executive may act within framework of existing laws, but cannot change meaning or operation of a law by issuing a clarification or circular that effectively rewrites or substitutes statutory provisions. (Para 64)

Result: Bail Application rejected.