Using Higher Denomination Note For Goods Of Lower Value Insufficient To Prove Knowledge For Possessing Counterfeit Currency: J&K High Court

“Unless it is shown that the person in possession of forged currency notes or the person using forged currency notes had either knowledge about the forged nature of the currency notes or he had reason to believe that the currency notes in question are forged, no liability can be fastened upon him in connection with offences under Section 489B and 489C of the RPC.”

The Court was hearing an appeal moved by a person who had allegedly purchased items with fake notes. He assailed his conviction by the trial court under Sections 489-B and 489-C of the Ranbir Penal Code (RPC), which deal with the use and possession of forged or counterfeit currency notes.

The appellant argued that the evidence presented failed to demonstrate his knowledge or reason to believe in the forged nature of the currency notes. 

The Bench examined the legal provisions and relevant precedents surrounding currency note forgery cases and highlighted that both Sections 489-B and 489-C require the defendant's knowledge or reason to believe in the counterfeit nature of the currency notes.

Justice Dhar observed that the prosecution's argument based on the appellant's choice to use a higher denomination note is not conclusive evidence of knowledge.

“It is not uncommon that a person buying goods from a shopkeeper tenders a currency note of higher denomination for purchase of goods of a lesser value even though the person may be in possession of currency notes of lower denomination. Generally, people do so in order to save currency notes of lesser denomination for future use. Thus, merely because the appellant tendered a currency note of higher denomination to the shopkeeper for purchase of articles, it cannot be concluded that he had knowledge of the forged nature of the currency notes.”

It further pointed out that the appellant's conduct of engaging in a confrontation with the shopkeeper after being alerted about the counterfeit notes contradicts the assumption of his knowledge.

"Imputation of knowledge to the appellant presumed by the trial court on the basis of his conduct is against logic and reasoning and hence the trial court has failed to appreciate the evidence on record in a proper perspective."

Additionally, the Court highlighted the appellant's defence that he is a businessman and could have received the notes innocently during transactions. It criticised the trial court for not considering this aspect and failing to properly appreciate the evidence. The prosecution's failure to seal the recovered currency notes and prove their authenticity further weakened the case.

It added was incumbent upon the prosecution to prove that the currency notes that were recovered from the possession of the appellant were the same that were examined by the expert.

As such, the appeal was allowed. 

Case Title: MOHAMMAD ASHRAF RESHI Vs STATE OF J&K

Citation: 2023 LiveLaw (JKL) 217

Click Here To Read/Download Judgment