Bombay High Court: Central Govt’s Notification Substituting References To IPC With BNS By Invoking S.8 Of General Clauses Act & Article 73 Not ‘Law’
The Bombay High Court said that the offences under the BNS 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.
Justice Amit Borkar, Bombay High Court
The Bombay High Court held that the Central Government’s Notification seeking to substitute references to Indian Penal Code, 1860 (IPC) with Bharatiya Nyaya Sanhita, 2023 (BNS) by invoking Section 8 of the General Clauses Act, 1897 (GCA) and Article 73, is not ‘law’ under Article 13 of the Constitution.
The Court held thus in a Bail Application filed under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) and Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA), seeking bail in a case registered by the Enforcement Directorate (ED).
A Single Bench of Justice Amit Borkar observed, “In view of the above discussion, the Court answers the legal questions as follows: (i) A notification issued by the Central Government dated 16th July 2024, seeking to substitute references to IPC with BNS by invoking Section 8 of the General Clauses Act and Article 73, does not amount to "law" within the meaning of Article 13 of the Constitution of India. (ii) Section 8 of the General Clauses Act is merely a tool of interpretation, not a source of legislative or executive power. (iii) Article 73 does not authorise the executive to alter legislative references or create binding legal norms without legislative sanction. (iv) The absence of authentication under Article 77 further deprives the said notification of any legal effect.”
The Bench said that the offences under the BNS 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.
Advocate Ajay Bhise appeared on behalf of the Applicant while Public Prosecutor H.S. Venegavkar appeared on behalf of the Respondents.
Brief Facts
The core issue that arose for consideration in this case was whether the references made in the PMLA to the provisions of IPC and the Criminal Procedure Code, 1973 (CrPC) stand vitiated or rendered ineffective by virtue of the repeal of those enactments through coming into force of BNS and BNSS. A further question that arose was 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 BNSS. A Special Case was registered 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-accused was in custody since November 20, 2024 in relation to this case.
As per the prosecution case, a huge amount of over ₹100 crores was deposited in 14 newly opened accounts at the Nashik Merchant Co-operative Bank. These transactions were allegedly layered and routed in a manner to conceal their illicit origin, giving rise to suspicion of money laundering. Consequently, an FIR was registered for the offences under BNS and then, the ED registered the case treating the offences disclosed in the FIR as scheduled offences under PMLA, and commenced investigation. Subsequently, the accused was arrested. He had earlier moved an Application for bail before the Special Court (PMLA), but the same got rejected. Therefore, he was before the High Court.
Court’s Observations
The High Court in view of the above facts, emphasised, “Merely giving a document the title of a "notification" is not enough to make it law under Article 13. The Court must look at the substance of the document, whether it has been issued under proper legal authority, and whether it is capable of creating, modifying, or extinguishing legal rights or liabilities. Only those instruments which derive their authority from a valid statute or from delegated legislative power can be said to have the force of law.”
The Court noted that in this case, the notification issued by the Central Government, which claims that references to IPC in existing laws shall now be read as references to BNS, is not shown to have been issued under any valid statutory provision.
“It is not based on any rule-making power conferred by a specific law, nor is it a delegated legislation passed under authority given by Parliament. The notification also does not amend or repeal any law, nor does it flow from any legislative competence delegated to the executive. Instead, it only reflects an executive opinion or understanding of how laws should be interpreted after the repeal of IPC. Such an understanding, however well-intentioned, cannot bind the Courts or override the principles of statutory interpretation”, it added.
The Court further remarked that the interpretation of statutes, especially criminal statutes, is the exclusive function of the judiciary and must be done according to settled legal doctrines such as legislation by incorporation and legislation by reference; therefore, this notification does not have the force of law, and hence, it cannot be treated as ‘law’ within the meaning of Article 13 of the Constitution.
“It does not have the status of a law that can affect, limit, or expand the fundamental rights of citizens, nor can it be used to support any action that impacts an individual’s legal status under existing statutes. … 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. Therefore, the contention of the applicant that the Enforcement Directorate had no jurisdiction to register the ECIR or proceed under PMLA due to the change in law is devoid of merit”, it also observed.
The Court, therefore, concluded that the prosecution is lawfully maintaining the case treating the BNS offences as predicates, and there is no illegality in the invocation of PMLA on this ground.
Accordingly, the High Court rejected the Bail Application.
Cause Title- Nagani Akram Mohammad Shafi v. The Union of India & Anr. (Neutral Citation: 2025:BHC-AS:27479)
Appearance:
Applicant: Advocates Ajay Bhise, Deepali Kedar, Sandeep Salonkhe, and Tejas Dhotre.
Respondents: Public Prosecutor H.S. Venegavkar, APP Supriya I. Kak, Advocates Aayush Kedia, and Leepika Basant.
