BNS offences can be scheduled offences under PMLA after IPC repeal: Bombay High Court

The Bombay High Court on Tuesday ruled that offences under the Bharatiya Nyaya Sanhita (BNS), 2023 can be treated as “scheduled offences” under the Prevention of Money Laundering Act, 2002 (PMLA), even though the new code is not expressly mentioned in the PMLA’s schedule after it replaced the Indian Penal Code (IPC) [Nagani Akram Mohammad Shafi v. Union of India]..The Court rejected a bail application that challenged the jurisdiction of the Enforcement Directorate (ED) to prosecute a money laundering case based on predicate offences registered under the BNS.Justice Amit Borkar held that BNS provisions that correspond to the repealed IPC offences already listed in the PMLA schedule, are to be treated as valid triggers for prosecution under the PMLA.“Offences under the Bharatiya Nyaya Sanhita, 2023 which correspond to offences listed in the PMLA schedule, as erstwhile IPC provisions, are to be regarded as scheduled offences for the purposes of PMLA, 2002. The absence of a textual amendment of the schedule does not disable the prosecution so long as the new law covers the same field of criminality,” the Court made it clear.A contrary interpretation would render the PMLA meaningless..The applicant had been arrested in November 2024 in connection with a money laundering investigation involving ₹100 crore allegedly routed through 14 newly opened bank accounts at Nashik Merchant Co-operative Bank, Malegaon.The prosecution case was based on predicate offences registered under BNS Sections 318(4) (cheating), 338 (forgery of valuable security) and 340(2) (using a forged document as genuine).These provisions correspond to IPC Sections 420, 467 and 471, respectively, which are scheduled offences under the PMLA..Challenging the validity of the prosecution, the applicant argued that since the PMLA schedule only lists IPC offences and has not been amended to include the BNS, proceedings under the PMLA could not be initiated based on BNS provisions. He emphasised that PMLA's schedule makes a specific and static reference to the IPC and any substitution with BNS offences would require express legislative amendment. The ED, in response, relied on Section 8(1) of the General Clauses Act, 1897, which mandates that references to repealed and re-enacted laws should be construed as references to the new enactments, unless a contrary intention appears..The Court rejected the applicant’s arguments and held that the PMLA refers to the IPC dynamically, not statically, meaning any changes to the IPC automatically apply to the PMLA without needing a separate amendment.It further observed that BNS is essentially a revision of the IPC and there is nothing to indicate that by enacting BNS, parliament intended to drop the anti-money laundering law."The BNS, 2023 is essentially a revision and reorganization of the IPC as it carries forward the same core offences such as cheating, criminal conspiracy, etc. though with some amendments and re-numbering. The is nothing to indicate that Parliament, by enacting the BNS, intended to drop those offences from the ambit of anti-money laundering law.".The Court also cautioned against adopting an interpretation that would defeat the purpose of the PMLA. "When an entire enactment is repealed and re-enacted, even with modifications, the presumption is in favour of continuity, especially when the substance of the law remains largely the same. To apply the doctrine of "legislation by incorporation" rigidly in such a scenario would lead to an absurd and unintended consequence, the PMLA, a crucial anti-money laundering statute, would be rendered toothless for all predicate offences committed after the commencement of the BNS, thereby creating a massive lacuna in the legal framework," it said.Ultimately, the Court ruled that there is “no different or contrary intention” in the PMLA to prevent application of Section 8 of the General Clauses Act. It concluded that offences under the BNS, if substantively similar to those in the IPC, are to be regarded as scheduled offences for the purposes of PMLA.The bail application was accordingly dismissed..Advocates Ajay Bhise, Deepali Kedar, Sandeep Salonkhe and Tejas Dhotre appeared for the applicant.Public Prosecutor H S Venegavkar with Advocates Aayush Kedia and Leepika Basant appeared for the ED.Additional Public Prosecutor Supriya Kak appeared for the State. .[Read Order]