GROUP - 11

CRIMINAL LAW - I

OFFENCES RELATED TO
COINS AND CURRENCY
NOTES

Submitted To :
Dr. Sharanjit Kaur
Associate Professor of Law

Submitted By: 17058

Kuldeep Garg Semester - V
Submitted on : 12/09/2019
 Contents

1. INTRODUCTION ............................................................................................................ 1

1.1 What is Coin? ....................................................................................................... 1

1.2 What are Currency Notes? ................................................................................... 2
2. OFFENCES RELATED TO COUNTERFEITING ...................................................... 4

2.1 Meaning of Counterfeiting ................................................................................... 4

2.2 Counterfeiting Coins ............................................................................................ 5
2.2.1 Making or Selling Counterfeiting Coins ....................................................... 5
2.2.2 Making, Selling and Possession of Instrument for Counterfeiting Coins ..... 6
2.2.3 Import or Export of Counterfeit Coin ........................................................... 6
2.2.4 Delivery of Counterfeit Coins ....................................................................... 6
2.3 Currency Notes ..................................................................................................... 7
3. COINAGE ACT, 2011 ...................................................................................................... 9

3.1 Diminished, Defaced and Counterfeit Coins........................................................ 9

3.2 Offences and Penalties ....................................................................................... 10
4. CASE STUDY – K. HASHIM V. STATE OF TAMIL NADU................................... 11

4.1 Facts ................................................................................................................... 11

4.2 Laws involved .................................................................................................... 11
4.3 Judgement........................................................................................................... 12
5. CONCLUSION ............................................................................................................... 14

5.1 Effectiveness of Laws ........................................................................................ 14

5.2 Way Forward and Suggestions........................................................................... 15
6. BIBLIOGRAPHY ........................................................................................................... 17

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 1. INTRODUCTION

The Government of India has the sole right to mint coins. The responsibility for coinage
vests with the Government of India in terms of the Coinage Act, 1906 as amended from
time to time. The designing and minting of coins in various denominations is also the
responsibility of the Government of India. Coins are minted at the four India Government
Mints at Mumbai, Alipore (Kolkata), Saifabad (Hyderabad), Cherlapally (Hyderabad)
and Noida (UP).

Coins in India are presently being issued in denominations of 10 paise, 20 paise, 25 paise,
50 paise, one rupee, two rupees and five rupees. Coins upto 50 paise are called 'small
coins' and coins of Rupee one and above are called 'Rupee Coins'. Coins can be issued up
to the denomination of Rs.1000 as per the Coinage Act, 2011.

1.1 What is Coin?

Coin is metal used for the time being as money and stamped and issued by the authority
of some State or Sovereign power in order to be so used. Indian coin is metal stamped
and issued by authority of the Government of India in order to be used as money.

This §230 defines ‘coin’ and ‘Indian coin’. This definition of ‘coin’ was introduced by
the Indian Penal Code (Amendment) Act, 1872 with a view to check the practice of
counterfeiting of copper coins of the Indian States. Similarly, the words ‘for the time
being’ were also introduced by the abovementioned Act with the intention of excluding
other old coins previously used as money. The section says that coin is that metal used
for the time being as money which is stamped and issued by the authority of some state
or sovereign power in order to be so used.

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The section expressly provides that coin must be used as money for the time being and it
is so used because sanction of the state or sovereign power is behind it in the form that it
is so stamped and issued by its authority. If it is not in use for the time being as money, it
is not a coin within the meaning of this section. Consequently, old coins of historical
interest are not coins as these are not used for the time being as money.

The section further says that Indian Coin is that metal which is stamped and issued by the
authority of the Government of India in order to be used as money; and metal so stamped
and issued continues to be coin within the meaning of this chapter.

The illustrations illustrate the definitions very well. Illustration (e) was added by the
Indian Penal Code (Amendment) Act, 1896.

1. Cowries are not coin.

2. Lumps of unstamped copper, though used as money, are not coin.

3. Medals are not coin, in as much as they are not intended to be used as money.

4. The coin denominated as the Company's rupee is Indian coin.

5. The "Farukhabad rupee" which was formerly used as money under the authority
of the Government of India is although it is no longer so used.

It is not necessary that coin has to be a legal tender receivable at a value in rupees fixed
by law. Gold mohars do not pass at a fixed value and yet they have a current value not
only because of the gold content in them but attaching to them as coin, and so are coins
‘for the time being used as money’ as mentioned in the definition.

1.2 What are Currency Notes?

The Reserve Bank has the sole authority to issue banknotes in India. Reserve Bank, like
other central banks the world over, changes the design of banknotes from time to time.

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The Reserve Bank has introduced banknotes in the Mahatma Gandhi Series since 1996
and has so far issued notes in the denominations of Rs.5, Rs.10, Rs.20, Rs.50, Rs.100,
Rs.500 and Rs.1000 in this series.

The legal tender character of the bank notes in denominations of ₹ 500 and ₹ 1000
mentioned above, issued by the Reserve Bank of India was withdrawn with the
promulgation of the Specified Bank Notes (Cessation of Liabilities) Ordinance 2016 (GoI
Ordinance No. 10 of 2016 dated December 30, 2016). As a result, with effect from
December 31, 2016, the above Bank Notes ceased to be the liabilities of the Reserve
Bank of India and ceased to have the guarantee of the Central Government.

The design of banknotes is approved by the central government, on the recommendation

of the central board of the Reserve Bank of India. Currency notes are printed at the
Currency Note Press in Nashik, the Bank Note Press in Dewas, the Bharatiya Reserve
Bank Note Mudran (P) Ltd at Salboni and Mysore and at the Watermark Paper
Manufacturing Mill in Hoshangabad. The Mahatma Gandhi Series of banknotes are
issued by the Reserve Bank of India as legal tender. The series is so named because the
obverse of each note features a portrait of Mahatma Gandhi. Since its introduction in
1996, this series has replaced all issued banknotes of the Lion capital series.1

1
“History of Indian currency: How the rupee changed” Times of India, 28 November 2016 at p. 9.

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 2. OFFENCES RELATED TO COUNTERFEITING

The issues of counterfeiting and infringement have been increasing with a great pace
since past few years and have attracted serious concerns of the law makers around the
world towards themselves and if we take this to the Indian perspective for this there are
relief provided in various statues such as The Copyright Act, 1957, The Trade Marks Act,
1999, The Patents Act, 1970, etc. But some relief are also provided in the Indian Penal
Code.

2.1 Meaning of Counterfeiting

According to

§28 - A person is said to "counterfeit" who causes one thing to resemble another thing,
intending by means of that resemblance to practice deception, or knowing. it to be likely
that deception will thereby be practiced.

Explanation 1- It is not essential to counterfeiting that the imitation should be exact.

Explanation 2- When a person causes one thing to resemble another thing, and the
resemblance is such that a person might be deceived thereby, it shall be presumed, until
the contrary is proved, that the person so causing the one thing to resemble the other
thing intended by means of that resemblance to practice deception or knew it to be likely
that deception would thereby be practiced.

Thus, when a person cause’s one thing to resemble another thing with the intention of
deceiving thereby or with the knowledge that deception will thereby be practised, he is
said to counterfeit. Explanation 1 makes it clear that it is not necessary that the imitation
should be exact. As long as there is such a close resemblance that deception may be
practised it is of no importance that, there are differences between the original and the
imitation, and if the abovementioned intention or knowledge is proved it will be a case of
counterfeiting. Actual deception takes place or not is of no consequence.

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Where there is no possibility of a deception because the imitation is so different from the
original, the case does not fall under this section. Explanation 2 which deals with the
question of presumption, states that when a person causes one thing to resemble another
thing and the resemblance is such that there is a likelihood of a person being deceived
thereby, the law shall presume that the intention of the person is to practise deception.
The SC has held that since the section nowhere restricts the subject-matter of the offence,
imitating foreign currency is also counterfeiting within the scope of this provision.2

The Supreme Court, in M. Mammutti v. State of Karnataka3, 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.

2.2 Counterfeiting Coins

Offences related to counterfeit of coins can be sub-categorized into four categories which
are making or selling the counterfeit coin; possession of instrument for counterfeit coins;
import or export of counterfeit coins; and delivery of counterfeit coins.

The gist of the offence is intention to stop practise of deceptions which is inferred from
closeness of imitation. A person must do it with intention to defraud government or for
self-gain. If done with any other intention, like making other person criminally liable by
placing counterfeit coins in his house do not make person liable under this chapter.4

2.2.1 Making or Selling Counterfeiting Coins

§233 and §234 of IPC talks about offence of making or selling counterfeiting coins and
offence of making or selling counterfeiting Indian coins respectively. These actions make
mere acts of preparation for committing offence of coining punishable. Essential
ingredients of these sections are – (i) accused counterfeited, (ii) thing counterfeited was a
coin, (iii) accused did it knowingly and (iv) act was done to practice deception.

2
K. Hashim vs State Of Tamil Nadu, (2005) 1 SCC 237.
3
AIR 1979 SC 1705.
4
Velayyudhan Pillai v. Emperor, AIR 1937 Mad 711.

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 2.2.2 Making, Selling and Possession of Instrument for Counterfeiting Coins

§233 to §235 of IPC make making, selling and possession of instrument or material for
purpose of counterfeiting coins punishable. These sections make mere acts of preparation
for committing offence of coining punishable. Essentials of these offences are (i) accused
made any die or instrument or that he bought, sold or disposed of such die, or is in
conscious possession5 of such instruments (ii) Accused did so knowingly or had reason
believe that such instrument was to be used for purpose of counterfeit coins. Main debate
here revolves around who is in the possession of the instrument. Various courts have
interpreted this section. In a case, it was held that person needs not to be the owner of
property where such instrument was found.6 Also, the instruments found along with the
instrument used for counterfeiting coins are also liable to be seized.7 It is the possession
of such instrument which is made liable and not merely the knowledge that someone has
such instruments. In a case where husband had kept such instrument and wife was in
knowledge of it, it was held that only husband is liable and wife was acquitted.8

2.2.3 Import or Export of Counterfeit Coin

§236 to §238 of IPC make abetting, or import-export of counterfeit coin punishable.

These sections are directed against illicit trafficking in counterfeit coins. Essential
Ingredients of these sections are (i) accused imported into or exported from India or
outside coin, (ii) such coins were counterfeit coins, (iii) accused knew then or had reason
to believe that coins were counterfeit, and (iv) accused deliver it fraudulently. The
offence is cognizable, non-compoundable and triable by Magistrate of First class.

2.2.4 Delivery of Counterfeit Coins

Sections 239-243 creates three classes of offences, namely (i) delivery to another of coin
possessed with knowledge that it is counterfeit; (ii) delivery to another of coin as

5
Khadim Hussain v. Emperor, AIR 1925 Lah 22.
6
Kashi Prasad v. State of Uttar Pradesh, AIR 1950 All 732.
7
Lal Chand v. R., (1911) 13 Punj LR 129.
8
Zamir Hussain v. Crown, AIR 1950 Lah 97.

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genuine, which when first possessed the deliver did not know to be counterfeit and (iii)
possession of counterfeit coin by person who knew it to be counterfeit when he became
possessed thereof.

§239 deals with offence of delivery of counterfeit coins possessed with knowledge that it
is counterfeit and punishes the wrongdoer with imprisonment for a term upto five years.
While §240 deals with aggravated form of offence created by delivery of Indian Coin.
§241 punish a casual possessor of base coin. §242 and §243 make mere possession of a
counterfeit coin by a person who knew it to be counterfeit when he became possessed of
it and keeps it fraudulently or with intent to defraud an offence respectively.

Possession must be with intent to defraud, and only possession of coin which the person
in possession knew to be counterfeit at time he became possessed of it is not criminal. A
person may get possession of counterfeit coin without knowledge that it is counterfeit. In
such cases, a person is not liable. 9 Again, if a person purchases counterfeit coin for
collection, his possession is not criminal as he had no intention to defraud.

2.3 Currency Notes

Prior to 1899, the offences relating to currency notes and bank notes were governed by
the provisions dealing with forgery of valuable securities (§ 467) and making or
possessing counterfeit currency seals, plates (§ 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 10 and § 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.

9
Kashi Prasad v. State of Uttar Pradesh, AIR 1950 All 732.
10
The Currency Notes Forgery Act , 1899.

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

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

(imprisonment for life or imprisonment for 10 years and fine)
2. § 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. §. 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).11
4. § 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. § 489 E deals with
i. Making or using documents resembling currency-notes or bank-notes (fine up to
Rs. 100).
ii. 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).

Unlike provision related to offences related to coins, there is no specific mention that
what all will currency notes include neither any separate provisions are made for
currency and Indian currency. But this was cleared by Hon’ble Supreme Court that the
counterfeiting of currency-notes not only of India but of foreign countries as well
constitutes 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.12

11
Bur Singh v. Emperor, AIR 1931 Lah 24.
12
State of Kerala v. Mathai Verghese, AIR 1987 SC 33.

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 3. COINAGE ACT, 2011

The Coinage Act has been followed in the United States of America and the United
Kingdom ever since 1792 and 1870 respectively. It deals with the legislation related to
Coinage. Even in India, the Coinage Act has existed from 1906 and was named the
Indian Coinage Act of 1906. But subsequently, by an amendment of Reserve Bank of
India Act, 1934, the words ‘Indian Coinage Act, 1906’ was substituted with the ‘Coinage
Act, 2011’.

It consolidated the Metal Tokens Act, 1889; the Coinage Act, 1906; the Bronze Coin
(Legal Tender) Act, 1918 and the Small Coins (Offences) Act, 1971.

The Coinage Act, 2011 is an Act that consolidates laws regarding coinage and the Mints.
It was enacted for protection of coinage and to prohibit the melting or destruction of
coins and also to prohibit the making or possession for issue. This Act extends to the
whole of India. It has 6 chapters and 28 sections. It came into force on 1st September,
2011.

The Act defines ‘coin’ as any coin which is made of a metal or any substance approved
by the central government or by any authority empowered by the government to issue
coins, and which is a legal tender including commemorative coin and Government of
India one rupee coin. Credit cards, debit cards, postal order and e-money issued by any
bank, post office and or financial institution are not included as coins.

3.1 Diminished, Defaced and Counterfeit Coins

Chapter IV (Sections 9, 10 and 11) of this Act deals with diminished, defaced and
counterfeit coins. Under Section 9, if a coin that is minted by a Government authorized
organization is doubted as being diminished in weight or defaced and is thus below
standard weight by a particular person, then that very person should break the coin.
Section 10 states that a coin which has been issued or minted by a Government
authorized organization, and is suspected by a person as being a counterfeit coin, then

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that coin shall be cut or broken, and he shall bear the losses. Lastly, Section 11 states that
a mint may authorize other organizations, like, Government industrial unit or a public
sector undertaking which possesses melting facilities, to melt withdrawn coins.

3.2 Offences and Penalties

Chapter V (Sections 12 to 16) of this Act deals with punishment for different offenses
under this Act. The Act prohibits anyone from making, melting or destroying coins
except persons authorized by the government. It also prescribes penalties for
contravention of these provisions. Any person bringing a piece of metal to be used as a
coin by sea, land or air without the permission of the government shall be penalized with
imprisonment and fine. The maximum punishment that an offender can be given is 7
years imprisonment and fine. The offences under this Act shall be cognizable and
bailable but not compoundable. The offences may be tried summarily by a Judicial
Magistrate of the first class or a Metropolitan Magistrate of first class or a Metropolitan
Magistrate.

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 4. CASE STUDY – K. HASHIM V. STATE OF TAMIL NADU

K. Hashim vs State Of Tamil Nadu, (2005) 1 SCC 237; 2005 SCC (Cri) 292.

Our country is becoming notorious for spiraling number of cases involving counterfeiting
of currency notes, both of our country and foreign countries and stamp papers. It is
becoming increasingly difficult for a lay man to be sure whether what he is receiving as a
currency note is genuine or a counterfeited one.

4.1 Facts

Initially, seven persons were accused of counterfeiting currency. But during the trial, one
died and two turned into approvers. Thus, only four were convicted by lower courts and
thus present appeal was filed only by four persons.
Police authorities recovered total of twenty two bundles of US Dollars of 20
denominations from all accused. Besides it, police also recovered printing inks in green,
yellow, light green and light yellow colours and printing blocks from one of the accused.
The accused persons pleaded innocence and false implication. The trial Court found the
accusations to have been established and accordingly recorded conviction and imposed
sentences under §120B r/w sections 489A, 489C and 489D.
Four appeals were filed before the High Court which did not yield any fruitful result to
the appellants and the appeals were dismissed by the common judgment impugned in the
present appeals.

4.2 Laws involved

Case law mainly revolved around §120B r/w sections 489A, 489C and 489D. §120B
provides for criminal conspiracy. The elements of a criminal conspiracy have been stated
to be (a) an object to be accomplished, (b) a plan or scheme embodying means to
accomplish the object, (c) an agreement or understanding between two or more of the
accused persons whereby, they become definitely committed to cooperate for the
accomplishment of the object by the means embodied in the agreement, or by any

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effectual means, and (d) in the jurisdiction where the statute required an overt act. The
essence of a criminal conspiracy is the unlawful combination and ordinarily the offence is
complete when the combination is framed.

Further question that was raised is whether the essential ingredients of Section 489A, C
and D are satisfied. The said provisions read as follows:

"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.”

“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.”

“489D- Making or possessing 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.”

4.3 Judgement

For an offence punishable under Section 120-B the prosecution need not necessarily
prove that the perpetrators expressly agree to do or cause to be done illegal act; the
agreement may be proved by necessary implication. Offence of criminal conspiracy
consists not merely in the intention of two or more, but in the agreement of two or more
to do an unlawful act by unlawful means. So long as such a design rests in intention only,
it is not indictable. When two agree to carry it into effect, the very plot is an act in itself,

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and an act of each of the parties, promise against promise, actus contra capable of being
enforced, if lawful, punishable if for a criminal object or for use of criminal means.

Section 489A not only deals with complete act of counterfeiting but also covers the case
where the accused performs any part of the process of counterfeiting. Therefore, if the
material shows that the accused knowingly performed any part of the process of
counterfeiting, Section 489A becomes applicable.

Similarly Section 489 B relates to using as genuine forged or counterfeited currency

notes or bank notes. The object of Legislature in enacting this section is to stop the
circulation of forged notes by punishing all persons who knowing or having reason to
believe the same to be forged do any act which could lead to their circulation.

Section 489C deals with possession of forged or counterfeit currency notes. It makes
possession of forged and counterfeited currency notes or bank notes punishable.
Possession and knowledge that the currency notes were counterfeited notes are necessary
ingredients. As it was observed by the Supreme Court in State of Kerala v. Mathai
Verghese 13 that the expression 'currency notes' is large and wide enough in its amplitude
to cover the currency notes of any country. Section 489C is not restricted to Indian
currency note alone but it includes dollar also and it applies to American dollar bills.

The wording of Section 489D is very wide and would clearly cover a case where a person
is found in possession of machinery, instrument or materials for the purpose of being
used for counterfeiting currency notes, even though the machinery, instruments or
materials so found were not all the materials particular required for the purpose of
counterfeiting.

In view of the credible, cogent and reliable evidence tendered, the inevitable conclusion
reached by SC was that the appellants have been rightly convicted under Section 120B
read with Sections 489A, 489C and 489D, IPC and separately under Section 489C of the
Code. The sentences as imposed do not warrant interference, particularly in view of the
object for which these provisions have been enacted. Appeals were dismissed.

13
AIR 1987 SC 33.

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 5. CONCLUSION

Law punishing counterfeiting or altering of currency notes have been a failure. It has
failed to curb the menace of fake currency, which is also a socio-economic offence.
Government has taken many steps, but some harsh steps with proper implementation
need to be taken to curb the menace of fake currency. Apart from it Law Commission of
India in its 42nd report various amendment to offences related to coins and currency.14

5.1 Effectiveness of Laws

Counterfeiting money has been prevalent throughout history and is sometimes called the
world’s “second oldest profession.” Traditional counterfeiters in most cases are
individuals or a group who counterfeit money for their own profit. But during modern
history, a new phenomenon appeared: states involved in counterfeiting the currency of
enemy states to destabilize their economy.

Criminal Law provisions punishing people for counterfeiting currency notes have been a
failure. It has not created the fear in mind of offender. This observation is supported by
the following facts. In India, the circulation of fake Indian currency notes (FICN) has
been on the rise, according to the Reserve Bank of India’s (RBI) annual reports. The year
2014-2015 saw a steep rise, with 594,446 FICN detected, up from 488,273 in the year
2013-14. When it comes to the type of notes counterfeited in 2014-15, RBI data showed
that counterfeited Rs500 notes were most common, with 273,923 recorded. Rs100 and
Rs1000 notes were the second and third most counterfeited bills, respectively

The Financial Action Task Force (FATF) report of 2013 found that the Indian rupee was
the ninth most counterfeited currency in terms of its value and stood third in terms of the
number of FICN detected around the world.

As reported by various sources, most counterfeit Indian currency notes are printed in
Pakistan. From Pakistan, FICN are either moved directly into India or make their way
through a network of other countries. Major transit points include India’s neighbouring
14
The Law Commission of India, Forty-second Report on The Indian Penal Code (1971).

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countries Nepal and Bangladesh. Dubai is another route that the traffickers use to
smuggle the fake currency notes into India.

To curb with problem of fake currency, BJP led government withdrew Indian currency
notes of 500 and 1000 denominations. But this move was no cure at all. The Rs100 note
is the second-most counterfeited note and the Rs50 is close behind; these notes will still
be in circulation and will continue to damage India’s economy. Even the new currency
notes launched by RBI are attacked by stigma of fake currency.The annual report of the
Reserve Bank of India (RBI) released Wednesday showed that fake notes detected in the
denominations of new Rs 500 and Rs 2,000 has jumped sharply even as overall detection
fell. The report said overall detection of counterfeit notes in 2017-18 was 31.4 per cent
lower than the previous fiscal — 522,783 pieces as against 762,072.The number of fake
notes of Rs 2,000 jumped to 17,929 in fiscal 2018 — a 2710 per cent increase from 638
pieces in 2016-17. Similarly, 9,892 pieces of counterfeit notes were detected in the new
Rs 500 banknotes in 2017-18 — a 4178 per cent jump from 199 in the previous fiscal.

5.2 Way Forward and Suggestions

The decision to invalidate five-hundred- and thousand-rupee denomination notes is a step

in the right direction, as most of the counterfeit currency seized till now has been in these
two denominations. This also makes sense, as five-hundred- and one-thousand-rupee
notes together constitute 86.4 percent of the total value of Indian currency in circulation.

The Indian government needs to build upon this move with a multipronged strategy
against counterfeiting by changing the cost/benefit calculus of decision makers in
Islamabad. The strategy must involve both increasing costs and reducing benefits, in
order to make the entire enterprise prohibitive. The present step of invalidating high-
denomination notes would render millions of counterfeit notes as paper scrap. A few
years ago, the Indian government amended its counterterror legislation and brought the
circulation of high-quality counterfeit currency under the ambit of a “terrorist act.”

It is also imperative to ensure that the new notes have high counterfeiting costs. The
invalidated five-hundred- and one-thousand-rupee notes had strong covert features, but it

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was the imitation of their overt features that dented their credibility. The new legal tender
needs to have robust overt security features. Covert features are important, but these
come into play only at the bank level, when the currency has already been circulated in
the market. Effective counterfeit-resistant overt security features would make it easier for
lay consumers to differentiate between genuine and counterfeit currency, thereby making
counterfeiting a less profitable venture.15

Ways to curb menace of fake money cannot be removed but reduced by following
advancements. Government should aim for research and development strategies. It should
start making more technologically advanced currency notes with realistic testing and
unique specifications. Government should aim for combination of security features such
as colour combinations, security threads, laminated paper, holograms, watermark etc. so
that money cannot be counterfeited. Multiple features add complexity to the
counterfeiter's task and increase the number of counterfeiting steps to the point that the
casual counterfeiter would “give up”. If the problem still exists, then government should
approach some proactive measures. A proactive strategy to currency design is one in
which new features are incorporated in anticipation of future threats, before a large
increase in counterfeiting occurs. Relative to the reactive strategy, this approach employs
a much lower threshold of tolerance. The practical advantages of the proactive approach
include the containment of small counterfeiting problems and the orderly transition to
new currency designs. Also, more changes to currency design would probably be made
under this strategy.

Apart from all technological advancements, government should aim for public education
and acceptance. Any technological advancement would be futile if public is not aware of
that thing. After doing all that, law enforcement consideration should be made harsher.
New law enforcement strategies to prevent counterfeiting at the source can be envisioned
that respond to the diffuse threat posed by many casual counterfeiters who use readily
available reprographic equipment to print a few counterfeit notes each.

15
Sajid Farid Shapoo, How India Can Stop the Next Fake-Money Crisis (2013) National Interest, available
at https://nationalinterest.org/feature/how-india-can-stop-the-next-fake-money-crisis-18459., last accessed
on 10th September 2019.

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 6. BIBLIOGRAPHY

BOOKS

 KD Gaur, Textbook on Indian Penal Code, Universаl Lаw Publishing Co. Pvt. Ltd.,
New Delhi, 2016.
 Ratanlal Dhirajlal, The Indian Penal Code, Lexis Nexis, New Delhi, 2014.
 PSA Pillia, Criminal Law, Lexis Nexis, New Delhi, 2017.
 HS Gaur, The Penal Law of India Vol.3, Law Publishers Pvt. Ltd., Delhi, 2013.

АRTICLES

 Sajid Farid Shapoo, How India Can Stop the Next Fake-Money Crisis (2013)
National Interest, available at https://nationalinterest.org/feature/how-india-can-stop-
the-next-fake-money-crisis-18459.
 “History of Indian currency: How the rupee changed” Times of India, 28 November
2016
 The Law Commission of India, Forty-second Report on The Indian Penal Code (1971).

STАTUTES

 The Indian Penal Code, 1860.

 The Coinage Act, 2011.

WEB SOURCES

 www.jstor.org.
 www.shodhgаngа.inflibnet.аc.in.
 www.scconline.com.
 https://аrchive.org/.

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