Introduction
In July 2025, the Bombay High Court through a judgment authored by Justice Borkar delivered a significant decision in Nagani Akram Mohammad Shafi v. The Union of India. The case arose from a challenge to ongoing proceedings under the Prevention of Money Laundering Act, 2002 (PMLA), after the repeal of the Indian Penal Code, 1860 (IPC) and its replacement by the Bharatiya Nyaya Sanhita, 2023 (BNS). The petitioner contended that since the PMLA’s schedule of predicate offences continued to refer to the repealed IPC and had not been formally amended to reflect the BNS, the proceedings were legally unsustainable.
The core of the case revolved around the distinction between legislation by reference (LBR) and legislation by incorporation (LBI). Even though the answer to the issue of whether the absence of an express government amendment invalidated the reference to IPC offences seems rather simple, the case soon unfolded into a complex analysis of statutory interpretation. The petitioner’s argument that the lack of government notification to update scheduled offences under PMLA rendered its operation defective forced the Court to examine the continuity of law under the new criminal codes. This blog will first outline the factual background of the case, then give an analysis of the two doctrines, it will then explore comparative perspectives from national and international jurisprudence surrounding the two doctrines before concluding.
The Factual Background
In the July 2025 bail application of Mr. Shafi, who was accused of laundering over ₹100 crore through accounts at the Nashik Merchant Cooperative Bank, the single judge bench of Bombay High Court addressed whether BNS offences could serve as valid predicate offences for the PMLA following the repeal of the IPC. The applicant challenged the maintainability of the prosecution and argued that the PMLA Schedule constituted legislation by incorporation, which meant that the reference to IPC offences was static and did not automatically update to include the BNS without a formal parliamentary amendment. To support this argument, the applicant relied on the Supreme Court’s decision in Mahindra & Mahindra Ltd. vs. Union of India & Anr., In contrast, the Enforcement Directorate (ED) argued that the PMLA was an instance of legislation by reference and placed reliance on Section 8(1) of the General Clauses Act, 1897. and the same Mahindra precedent to assert that references to a repealed act must automatically point to the corresponding provisions of the re-enacted law. The court ultimately ruled in favour of the ED and held that the PMLA’s references are dynamic, thus the legal continuity was ensured and BNS offences were allowed to be treated as scheduled offences.
A Temporal Perspective on the two doctrines
These doctrines are far from modern devices, they are rather the bedrock of legislative architecture and trace their lineage back to the 13th century English Parliament. It is remarkable that a technique debated and discussed as early as the 1591 case of Barnes v. May holds such relevance in modern times. Their relevance, or, survival, is not merely some form of legal tradition, rather it is a strong necessity for the legislature as they allow modern states to integrate specialized codes or laws in newly enacted laws laws without the redundancy of drafting exhaustive codes for every subject. Without these tools the law would arguably crumble under its own weight and the need for brevity would never be reconciled with the constitutional mandate for clarity as there would be endless debates as to which of the two or more laws has to be read and applied in a given scenario.
In the modern times, LBR has rightfully emerged as the norm to ensure that the legal framework remains a living link rather than an archival relic. While critics like Lord Reid in Minister of Housing and Local Govt. v. Hartnell once warned that this technique often achieves “brevity at the expense of lucidity,” static incorporation is a far greater risk in a fast paced and constantly changing social environment in which laws are enacted and amended all the time. LBR provides the essential scaffolding for a law that is always speaking and ensures that foundational statutes automatically adapt to shifting social and scientific norms. It essentially prioritizes dynamic continuity over archival drafting and thus effectively prevents the creation of “toothless” statutes, as stated by the court in Shafi, that would otherwise be rendered obsolete the moment a referenced provision is amended. For more time bound or time specific laws LBI is clearly needed, however such situations are not as common as LBR, as the language for the application of LBI on a referenced provision needs to be positive and explicit, and strong desire for LBI needs to be shown by the legislature.
Jurisprudence surrounding the debate between Legislation by Reference v. Legislation by Incorporation
The main legal question that determined the PMLA’s ongoing enforceability after the repeal of the IPC hinges entirely upon the debate on the two doctrines. The central difference is essentially whether the statutory link is dynamic or static. LBI is the “bodily lifting” of provisions from one enactment which makes them a fixed part of the later statute, meaning subsequent repeal or amendment of the former Act leaves the latter “wholly untouched”. This device is sometimes described as “archival drafting”. On the other hand, LBR involves a mere citation which allows the referring statute to dynamically adopt later changes to the referenced law. The statutory basis for LBR in India is Section 8(1) of the General Clauses Act, 1897 which mandates that a reference to a repealed and re-enacted provision “shall, unless a different intention appears,” be construed as a reference to the new provision, and this section played a big role in the case at hand. Internationally, the distinction is ancient; the principle underlying LBI is reflected in the maxim verba relata hoc maxime operantur per referentiam ut in eis inesse videntur (words referred to operate as if inserted). The earliest known precedent discussing LBI is the English case of Barnes v. May (1591), while Lord Esher described the effect of incorporation as if writing the clauses into the new Act “with the pen” in Wood’s Estate, Re. In the present case, the High Court relied heavily on the Supreme Court’s analyses in Collector of Customs, Madras vs Nathella Sampathu Chetty and Anr. and Mahindra & Mahindra Ltd. vs Union of India to draw this precise distinction. The applicant, in turn relied on the recent finding of LBI in Insolvency and Bankruptcy Board of India vs. Satyanarayan Bankatlal Malu & Ors. to argue for static incorporation, however the case could not be applied, as in that case one law had borrowed specific provisions and text from another law, whereas in the present case the BNS had merely referred to IPC offences as categories, which was a fundamentally different legislative exercise than the one in Malu.
The Indian judicial debate focuses on discerning legislative intent and has noted several times that explicit and positive language is typically required to prove LBI. The Supreme Court in Girnar Traders (3) vs. State of Maharashtra and others clarified that a general reference to an earlier Act suggests LBR while specific reference and incorporation indicate LBI. A separate area of contestation involves the adoption of definitions; decisions in cases like Bolani Ores Ltd. vs State of Orissa and Ram Sarup vs Munshi affirmed that when definitions are incorporated by reference, they are frozen in time and remain unaffected by subsequent amendments or repeal of the original Act. Furthermore, Indian jurisprudence developed necessary exceptions to the rigid doctrine of LBI which was outlined in State of M.P. vs M.V. Narasimhan which apply when LBI is suspected. These exceptions mandate dynamic updating when the Acts are supplemental (as recognized in Western Coalfields Ltd. v. Special Area Development Authority), are in pari materia, or if strictly static interpretation would render the later Act “wholly unworkable and ineffectual”. However, interpretations of this area have sometimes conflicted; for instance, the ruling in U.P. Avas Evam Vikas Parishad v. Jainul Islam was criticized for finding incorporation without the requisite explicit language and for overlooking the dependency of the implementing Act on the procedures of the former Act.
The Debate in International Context
The international debate mirrors these conflicts and focuses more on the practical implications of legislative drafting techniques. Critics frequently point out that legislative reliance on reference often achieves “brevity at the expense of lucidity”, a practice Lord Reid of the House of Lords criticized as a “regrettable modern tendency to overdo legislation by reference”. Historically, the dogma of requiring all counts in a pleading to be complete, which necessitated incorporation, was abolished in England by the mid-19th century through cases like Watson v. Hawkins and Nathan v. Batchelor. The Australian context uses this distinction keenly in regulations which include static incorporation and dynamic incorporation(which involves a form of delegation of law-making power), though Australian courts have rejected claims that dynamic incorporation necessarily constitutes unlawful delegation, an example of the judges doing so is in Dainford Ltd v Smith. More recently, the 2023 Northern Ireland Court of Appeal decision in Department of Justice v. JR123 addressed the constitutional justification for using static legislative mechanisms such as “legislating by reference to pre-defined categories” or “bright line rules”. The court found that these fixed categories were defensible because they promote certainty and efficiency and thus acted within the legislature’s discretionary area of judgment even if they result in individual hard cases.
Analysis of the judgement
It is clear from this case that the dynamic mechanism of LBR is particularly vital in scenarios where a foundational penal code is repealed and re-enacted, such as the transition from the IPC to the BNS. By merely referencing these offences rather than reproducing them word-for-word, enforcement frameworks like the PMLA are able to preserve the efficacy of the referenced legislation forever, as Section 8(1) of the General Clauses Act automatically points the citation to the reenacted equivalents. To insist on a static, word for word incorporation in these instances would be a catastrophic judicial error and would render the law, as the court stated, toothless, and unworkable by creating a legal vacuum the moment the original source statute is repealed.
It cannot be argued in any stretch of imagination that the provisions of scheduled offences within the IPC were time specific and that their reference in PMLA was by way of LBI, as the scheduled offence in question, aggravated cheating, forgery, and the fraudulent use of forged documents(Sections 318(4), 338, and 340(2) of the BNS respectively) are ever happening crimes, and it could not be said that the definitions in IPC were set strictly and were the only correct definitions as opposed to the definitions in the BNS. Further, the written definitions of these scheduled offences are identical in both the IPC and the BNS, and the positive and explicit wording which is required for LBI is missing in PMLA. Thus, it could be said that the case was nothing more than a ruse to place an appeal against the denial of grant of bail, however it did add substantially to the jurisprudence surrounding the doctrines.
Conclusion
The judgement shows the important role played by established doctrines of statutory interpretation in safeguarding the PMLA. As explored in this blog, the legal debate between legislation by reference and legislation by incorporation is complex and well defined by a long line of precedents, ultimately, however, the successful argument relied not just on common law principles but on the explicit statutory mandate provided by the General Clauses Act, 1897. Section 8(1) of the GCA statutorily embodies the dynamic nature of legislation by reference, which automatically substituted the repealed IPC sections with their reenacted equivalents in the BNS. The Bombay High Court thus delivered a sound and reasonable judgement by holding that applying the static doctrine of incorporation would result in the absurd and unintended consequence of rendering the PMLA useless. By applying the principle of purposive construction and holding that no different intention appears in the PMLA, the Court ensured the continuous operation of the law. This verdict rightly upheld the legislative intent behind the PMLA and preserved its efficiency.
(This post has been authored by Aditya Pathak, fourth-year law student at National Law Institute University, Bhopal.)
CITE AS: Aditya Pathak, ‘Legislation by Incorporation & Legislation by Reference – The Modern View in light of the Recent Bombay High Court Judgement’ (The Contemporary Law Forum, 24 February 2026) <https://tclf.in/2026/02/24/legislation-by-incorporation-legislation-by-reference-the-modern-view-in-light-of-the-recent-bombay-high-court-judgement> date of access.