Possession of counterfeit currency alone not an offence: Punjab and Haryana High Court

The Punjab and Haryana High Court has recently held that mere possession of counterfeit currency does not constitute an offence under Sections 489B and 489C of the Indian Penal Code (IPC) in the absence of mens rea or criminal intent.

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The ruling came as a Division Bench upheld a two-decade old decision of a fast-track court in Ludhiana acquitting two

individuals in a 1999 case involving the alleged recovery of counterfeit currency. Sections 489B and 489C deal with the possession and use of forged or counterfeit currency.

The matter was placed before the Bench after the state government challenged the acquittal judgment by an Additional Sessions Judge on March 10, 2014. The case stemmed from an FIR registered on January 6, 1999, under the two provisions of the IPC.

The Bench was told that 28 counterfeit currency notes of Rs 500 denomination were recovered from the purse of one accused while 10 counterfeit notes of the same denomination were found in the possession of the other in the Basti Jodhewal area, all of which were seized through separate recovery memos.

Taking up the appeal, the Bench of Justice Sureshwar Thakur and Justice Sudeepti Sharma asserted: “To convict any person under both sections, the necessary ingredients are intention to possess as well as to use the counterfeit notes as genuine. In the present case, the essential ingredients are not fulfilled

by evidence led by the prosecution”.

In its detailed order, the Bench observed that a document presented in the trial court revealed that the determination of currency notes being counterfeit was based solely on their failure to match three genuine currency notes. The record further revealed that the expert report lacked a detailed forensic analysis, “particularly with regard to the specific characteristics of the discrepancies.”

The Bench ruled that the prosecution’s case was fundamentally flawed starting with a witness who allegedly disclosed to a police party that one of the accused had handed over a counterfeit currency note of him for purchase of fruits from his ‘rehri’.

The Bench asserted his testimony and cross-examination revealed that the prosecution’s version was based on a false narrative, as he categorically denied the allegations

and testified that the police had obtained his signatures on blank papers, thereby casting doubt on the prosecution’s credibility.

The Bench also observed that the integrity of the seized counterfeit currency was compromised. The notes were not sealed in the presence of witnesses and there was no reliable evidence regarding the chain of custody or proper sampling to ensure the integrity of the seized currency. The lack of evidence undermined the prosecution’s case, as proving the chain of custody was crucial in establishing that the integrity of the seized samples was never compromised.

Upholds decades old decision

The ruling came as a Division Bench upheld a two-decade old decision of a fast-track court in Ludhiana acquitting two individuals in a 1999 case involving the alleged recovery of counterfeit currency. Sections 489B and 489C deal with the possession and use of forged or counterfeit currency.