Mere Possession Of Counterfeit Notes Not Sufficient Under Section 489C IPC Unless Mens Rea & Knowledge Are Established: Calcutta High Court

"It is settled proposition of law that in order to attract Section 489C mere possession of counterfeit note is not sufficient unless the Mens rea having knowledge about the counterfeit note and to use it or receiving or buying as genuine note is to be established." Calcutta High Court, in a significant ruling, held that the mere possession of forged or counterfeit currency notes is insufficient to sustain a conviction under Section 489C of the Indian Penal Code (IPC).

A single-judge bench of Justice Chaitali Chatterjee Das observed that the prosecution must affirmatively establish mens rea, specifically that the accused had knowledge of the counterfeit nature of the notes and intended to use them as genuine.

The case arose from a criminal appeal filed by Kumud Mandal and another appellant against a 2015 judgment by the Additional Sessions Judge, Malda. The appellants had been sentenced to five years of rigorous imprisonment following an alleged police raid in the Chunakander forest, where they were purportedly found in possession of 129 forged Indian currency notes of Rs. 500 denomination. The appellants challenged the conviction on grounds of procedural irregularities and lack of expert evidence.

The primary question before the court was whether the evidence on record was sufficient to prove the charges under Section 489C IPC, especially when independent seizure witnesses turned hostile. The court was also called upon to determine if the investigation suffered from fundamental lapses that rendered the recovery of the alleged counterfeit notes doubtful.

Proof Of Mens Rea And Knowledge Essential For Conviction

The Court emphasized that for an offense under Section 489C IPC to be made out, the prosecution must prove more than just physical possession. It noted that it must be established that the accused intended to use the forged notes as genuine or had the knowledge that the notes were counterfeit at the time of possession. The bench remarked that without such evidence, the statutory requirements of the section remain unfulfilled.

"Before that it is to be established that the notes were recovered from the possession of the accused and it was counterfeit. In the present case excepting the raiding team no other witness supported the prosecution case and the seizure list witnesses turned hostile."

Hostility Of Independent Witnesses Vitiates Seizure Process

During the trial, the independent witnesses to the seizure, identified as P.W. 5 and P.W. 6, turned hostile and refused to support the prosecution's narrative. They testified that their signatures were obtained by police officers on blank papers at the police station rather than at the place of occurrence. The High Court observed that the trial court should not have brushed aside these denials to rely solely on the testimony of police officials.

"The seizure list were not proved as the seizure list witnesses turned hostile as they all stated that they put their signature on a blank paper. The Learned session court did not accept such denial and put reliance on the evidence of the police officials."

Significant Contradictions In Testimonies Of Raiding Party

The High Court meticulously analyzed the depositions of the police witnesses (P.W. 1 to P.W. 4 and P.W. 7) and found glaring inconsistencies regarding the number of notes recovered and the details of the raid. While one officer claimed 125 notes were found, another cited 129, and some could not even recall the vehicle numbers or the specific distance of the nearest village from the spot of the raid.

"On careful scrutiny of the entire evidences of the prosecution witnesses no convincing materials can be found to establish prosecution case. The I.O. did not seize the log book of the car by which the raiding party went to such forest... and no command certificate was produced."

Investigation Lapses And Failure To Prove Expert Report

Justice Chatterjee Das highlighted severe procedural laches, noting that the Investigating Officer (P.W. 8) failed to produce General Diary (GD) entries regarding the dispatch of notes for expert opinion. Furthermore, the expert report from the Bharatiya Reserve Bank Note Mudran (P) Limited was not properly proved by examining the manager who authored the report. The court found that these gaps made the prosecution's case unsustainable in the eyes of law.

"The notes being counterfeit alone does not establish the offences under Sections 489C IPC... this court is unable to accept the views of the learned trial court in absence of any convincing materials."

The High Court concluded that the investigation was faulty and the evidence produced was riddled with inconsistencies that failed to bridge the gap between "may be true" and "must be true." Consequently, the Court set aside the judgment of conviction and order of sentence dated May 29, 2015. The appellants were acquitted of all charges and ordered to be discharged from their bail bonds immediately.

Date of Decision: 08 July 2026