The section contemplates that the offender must sell to any other person or must buy or must receive from any other person or he must otherwise traffic in or must use as genuine any forged or counterfeit currency-note or bank note. He must do so with the knowledge or having reason to believe that the same is forged or counterfeit. This is a very serious offence as is clear from the quantum of penalty prescribed.
Where a person gets a counterfeit currency-note, in the course of his business, which looks suspicious and he tries to get rid of it, he does not commit an offence under this section. A police officer approached certain counterfeits belonging to a gang by posing as the son of a planter and offered that he would exchange counterfeit two rupee currency notes worth seventy five thousand rupees for genuine two rupee currency-notes worth twenty five thousand rupees.
On the appointed day he pretended that he had brought the genuine notes, even though he had not brought them, and the accused brought bundles of paper-cuts interspersed with genuine notes. It was held that sections 420 and 489-B were not attracted as the intention of the accused was to pass counterfeit notes as counterfeit notes and not as genuine notes as is contemplated by the section.
In Ponnuswamy v. State the accused had purchased paddy from a peasant and paid one hundred and thirty forged Rs. 100/- currency-notes. On his arrest further forged currency notes were recovered from him for which separate trial was ordered. He could give no explanation as to wherefrom he had obtained the notes. The Supreme Court convicted and sentenced him under section 489-B of the Code.
In Veera Swamy Shanmugam Sunderam v. State of Andhra Pradesh, the accused was alleged to have presented a fake one hundred rupee currency note to the booking clerk for purchasing a railway ticket. The Andhra Pradesh High Court held that since the accused had neither knowledge that the note was counterfeit nor had he the intention to make use of it for undue gain his conviction was not proper.
In Abdul Majeed Abdul Rahman Sarkhot v. State of Maharashtra currency-note found in possession of the petitioner showed no apparent sign of being counterfeit. The accused is an ordinary man. The Bombay High Court held that his mere possession would not be sufficient to presume that he used it knowing that it was counterfeit so he was not guilty under sections 489-A and 489-B of the Code.
In Bharati v. State of Maharashtra the accused was found using fake currency notes in the market. On search of her person, fake currency notes of Rs. 500 and 50 were recovered. Later house search of the accused and her husband led to recovery of one side printed currency notes and other materials used for printing take currency notes. The treasurer of the Reserve Bank also confirmed the alleged currency notes as fake. The Bombay High Court held the conviction of the accused proper under sections 489-A, 489- B and 489-C and 489-D of the Code.
In Jayeshkumar Kantilal Panchal v. State of Gujarat, the accused allegedly printed fake currency notes and sold them. The Gujarat High Court held that this is an offence against the nation which would affect its economy. The accused was a qualified engineer. No leniency could be shown to him. The sentences of imprisonment for ten, seven, five and ten years respectively under sections 489-A, 489-B, 489-C and 489-D of the Code for each of the offences were not liable to be reduced.
In Mohammad Raja alias Raj è and others v. State of West Bengal, the accused persons were found to be in possession of counterfeit currency-notes. The Calcutta High Court held-that knowledge of the accused persons that the notes were fake could be presumed because mere look at them convinced police officials that they were counterfeit. The accused were held guilty under sections 489-B and 489-C of the Code.
In K. Hasim v. State of Tamilnadu? the Supreme Court observed that the object of this section is to stop circulation of forged notes by punishing all who knowing or having reason to believe the same to be forged do any act which could lead to their circulation.
The offence under this section is cognizable, non-bailable and non-compoundable, and is triable by court of session.