NAMCO banking fraud: PMLA court rejects bail plea of key accused

MUMBAI: A special PMLA (Prevention of Money Laundering Act) court has rejected the bail plea of Nagani Mohammad Shafi, arrested by the Enforcement Directorate (ED) in connection with the multi-crore suspicious transactions involving the Nashik Merchant Cooperative (NAMCO) Bank. Shafi along with several others are accused of fraudulently opening bank accounts in Nashik Merchant Cooperative (NAMCO) Bank and transferring crores of rupees to shell companies in Dubai through these accounts.

ED’s investigation stems from a police probe against a Malegaon-based trader, Siraj Ahmed Memon, and his associates on a complaint by an individual whose bank account was allegedly misused for unauthorised fund transfers.

As per the ED, Shafi was the main accomplice of Memon, who helped the latter open bank accounts to transfer funds to shell companies. The bank accounts were opened in the NAMCO bank and in the Bank of Maharashtra.

However, the bail plea was not filed based on the merits of the case but on the grounds that the offences are not scheduled offences under Bharatiya Nyaya Sanhita (BNS). The defence claimed that there is no incorporation by legislation in PMLA of the new law, BNS, which replaced the Indian Penal Code (IPC). Under PMLA, only sections of IPC have been incorporated in the schedule.

Shafi’s lawyer sought bail on technical grounds, arguing that he is entitled to be released on bail as there is no scheduled offence. Scheduled offences are crimes that are listed in a statute’s schedule.

The court rejected the bail plea, observing that the predicate offence and money laundering are two distinct offences, and there is no overlap between them. “Except in the schedule of the PMLA, there is no bodily lifting of a provision of IPC and making it part of the PMLA”, said the court.

The court relied on a modification issued by the central government in July 2024 under the General Clauses Act, wherein it was stated that any reference to IPC, Criminal Procedure Code and the Indian Evidence Act should be read as the reference of the Bharatiya Nyaya Sanhita, 2023.

In a detailed order passed on February 5, special judge AC Daga said, “It cannot be said that there is no scheduled offence. As scheduled offence which classifies registration of instant ECIR (enforcement case information report) is there. Therefore, no case is made out by the applicant/accused for granting of bail on the technical point raised in the application,”