Law of Crimes – II

Of

OFFENCES

RELATING TO

CURRENCY-NOTES

AND

BANK-NOTES

PROJECT WORK SUBMITTED FOR INTERNAL ASSESSMENT

 Prior to 1899, the offences relating to currency notes and bank
notes were governed by the provisions dealing with forgery of valuable
securities (s. 467) and making or possessing counterfeit currency seals, plates
(s. 472). These sections proved less effective for securing convictions for
counterfeiting or possessing counterfeit currency notes as well as for making
or possessing instruments for counterfeiting currency notes.
In order to protect the currency notes and bank notes from forgery sections
489 A to 489 D were added to the IPC by the Currency Notes Forgery Act 1899
and section 489 E was added to the IPC by the Indian Penal Code
(Amendment) Act 1943, for prohibiting and penalizing the acts of bringing in
circulation photo-prints or otherwise printed or reproduced or imitated
currency-notes or bank-notes.
The s. 28 of IPC defines Counterfeiting as an act which causes one thing to
resemble another, intending by means of that resemblance to deceive.
The three conditions that are required as mentioned under this definition are:
i. Causing one thing to resemble another;
ii. Intending by means of that resemblance to cause deception, and
iii. Knowing it to be likely that deception will be thereby practiced.

The Supreme Court, in M. Mammutti v. State of Karnataka, emphasised that

the basic test to prove counterfeit currency is to see whether even an ordinary
person would by a mere glance be fooled by the note fraudulently made.

Scope of sections 489 A to 489 E

The sections 489 A to 489 E in the IPC are arranged on the following basis:

1. S. 489 A describes the offence of Counterfeiting currency-notes and

bank-notes (imprisonment for life or imprisonment for 10 years and
fine)
2. S. 489 B deals with selling, buying or using as genuine, forged or
counterfeit currency-notes or bank-notes, knowing the same to be
forged or counterfeit (imprisonment for 10 years and fine)
3. S. 489 C deals with possession of forged or counterfeit currency-notes
or bank-notes, knowing or having reason to believe the same to be
forged or counterfeit and intending to use the same as genuine
(imprisonment for 7 years or fine or both)
4. S. 489 D deals with the making or possessing instruments or materials
for forging or counterfeiting currency-notes or bank-notes
(imprisonment for life or imprisonment for 10 years and fine)
5.
i. Making or using documents resembling currency-notes or bank-
notes (fine up to Rs. 100).
ii. Refusal by the person whose name appears on a document to
disclose to a police officer, the name and address of the person by
whom the document was printed or otherwise made (fine up to
Rs. 200).
In State of Kerala v. Mathai verghese, the Supreme Court held that the
counterfeiting of currency-notes not only of India but of foreign
countries as well, constitute offence under s. 489 A, IPC. The expression
 ‘currency-note’ in s. 489, IPC is wide enough to embrace currency notes
issued by India as also those issued by any other country in the world.

Sections relating to the offence under the

Indian Penal Code

489A. Counterfeiting currency-notes or bank-notes

Whoever counterfeits, or knowingly performs any part of the process of

counterfeiting, any currency-note or bank, note, shall be punished with
[imprisonment for life], or with imprisonment of either description for a term
which may extend to ten years, and shall also be liable to fine.

Explanation: For the purpose of this section and of sections 489B, [489C, 489D
and 489E], the expression bank-note, means a promissory note or
engagement for the payment of money to bearer on demand issued by any
person carrying on the business of banking in any part of the world, or issued
by or under the authority of any State or Sovereign Power, and intended to be
used as equivalent to, or as a substitute for money.

CLASSIFICATION OF OFFENCE

Punishment - Imprisonment for life or imprisonment for a term of 10 years

and fine

Cognizable, Non-bailable and Triable by Court of Session, Non-compoundable

489B. Using as genuine, forged or counterfeit currency-notes or bank-
notes

Whoever sells to, or buys or receives from, any other person, or otherwise
traffics in or uses as genuine, any forged or counterfeit currency-note or bank-
note, knowing or having reason to believe the same to be forged or
counterfeit, shall be punished with [imprisonment for life], or with
imprisonment of either description for a term which may extend to ten years,
and shall also be liable to fine.

CLASSIFICATION OF OFFENCE

Punishment - Imprisonment for life or imprisonment for a term of 10 years

and fine

Cognizable, Non-bailable and Triable by Court of Session, Non-compoundable

489C. Possession of forged or counterfeit currency-notes or bank-notes

Whoever has in his possession any forged or counterfeit currency-note or

bank-note, knowing or having reason to believe the same to be forged or
counterfeit and intending to use the same as genuine or that it may be used as
genuine, shall be punished with imprisonment of either description for a term
which may extend to seven years, or with fine, or with both.

CLASSIFICATION OF OFFENCE

Punishment - Imprisonment for a term of 7 years, or fine, or both

Cognizable, Bailable and Triable by Court of Session, Non-compoundable

489D. Making or possession instruments or materials for forging or
counterfeiting currency-notes or bank-notes

Whoever makes, or performs, any part of the process of making, or buys or

sells or disposes of, or has in his possession, any machinery, instrument or
material for the purpose of being used, or knowing or having reason to believe
that it is intended to be used, for forging or counterfeiting any currency-note
or bank-note, shall be punished with [imprisonment for life], or with
imprisonment of either description for a term which may extend to ten years,
and shall also be liable to fine.

CLASSIFICATION OF OFFENCE

Punishment - Imprisonment for life or imprisonment for a term of 10 years

and fine

Cognizable, Non-bailable and Triable by Court of Session, Non-compoundable

489E. Making or using documents resembling currency-notes or bank-

notes

(1) Whoever makes, or causes to be made, or uses for any purpose

whatsoever, or delivers to any person, any document purporting to be, or in
any way resembling, or so nearly resembling as to be calculated to deceive
any currency-note or bank-note shall be punished with fine which may extend
to one hundred rupees.
(2) If any person, whose name appears on a document the making of which is
an offence under sub-section (1). Refuses, without lawful excuse, to disclose to
a police-officer on being so required the name and address of the person by
whom it was printed or otherwise made, he shall be punished with fine which
may extend to two hundred rupees.

(3) Where the name of any person appears on any document in respect of
which any person is charged with an offence under sub-section (1) or on any
other document used or distributed in connection with that document it any,
until the contrary is proved, be presumed that person caused the document to
be made.

CLASSIFICATION OF OFFENCE

Punishment - Fine of 100 rupees, Non-Cognizable, Bailable and Triable by any

Magistrate, Non-compoundable.