BNS Offences Qualify as Scheduled Offences Under PMLA Even Without Formal Amendment: Bombay HC [Read Order]

In a recent ruling, the Bombay High Court held that offences under the Bharatiya Nyaya Sanhita (BNS), 2023, can be treated as scheduled offences under the Prevention of Money Laundering Act (PMLA), 2002, even without a formal amendment to the PMLA Schedule.

Nagani Akram Mohammad Shafi filed a bail application after being arrested on 20 November 2024 in a case involving the alleged laundering of over Rs. 100 crore. The Enforcement Directorate accused him of routing money through multiple newly opened bank accounts to conceal the source of the funds, which were believed to be proceeds of crime.

The case was based on an FIR that cited cheating and forgery offences, which were formerly part of the Indian Penal Code but are now listed under Sections 318(4), 338, and 340(2) of the BNS.

The petitioner’s counsel argued that since the PMLA Schedule still refers to offences under the Indian Penal Code and had not yet been updated to include BNS provisions, the ED had no jurisdiction to act.

The counsel argued that references in the PMLA to the IPC were made by legislation through incorporation, meaning those references are fixed and cannot be substituted automatically by new laws.

They also submitted that the Ministry of Finance notification dated 16 July 2024, which attempted to equate BNS sections with IPC offences, had no legal force and could not substitute an actual legislative amendment.

The Enforcement Directorate’s counsel argued that the PMLA Schedule should be interpreted dynamically and that under Section 8 of the General Clauses Act, 1897, references to repealed laws are to be construed as references to their re-enacted counterparts, unless the context requires otherwise.

They argued that the BNS provisions are substantively identical to the repealed IPC provisions and that treating them as distinct would create a legal vacuum, disrupting enforcement under the PMLA.

The single-judge bench of Justice Amit Borkar observed that the PMLA Schedule does not incorporate the IPC provisions word-for-word but merely refers to them. The court held that this kind of reference is to be interpreted in light of Section 8 of the General Clauses Act, which allows for substitution when a statute is repealed and replaced.

The court found that there was no contrary intention in the PMLA that would prevent this substitution from taking effect. The court found that the offences under the BNS were equivalent in nature and content to the earlier IPC offences and that requiring a formal legislative amendment to the Schedule would defeat the purpose of the PMLA.

The court rejected the argument that the ED’s action was unlawful and held that proceedings could continue even without formal changes to the PMLA Schedule. The court dismissed the bail application and upheld the ED’s authority to proceed with the case under PMLA.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates