Offences Relating to Coin, Currency-Notes, Bank-Notes and Government Stamps

Section 181, instruments and materials. Making, mending, performing any part of the process of making or mending, buying, selling, disposing of, or possessing any machinery, die, instrument or material for the purpose of being used, or knowing or having reason to believe it is intended to be used, for forging or counterfeiting: imprisonment for life, or up to ten years, and fine.

Section 182, documents resembling notes. Making, causing to be made, using for any purpose, or delivering to any person, a document purporting to be, resembling, or so nearly resembling as to be calculated to deceive, any currency-note or bank-note: fine up to three hundred rupees. Sub-section (2) punishes a refusal, without lawful excuse, to disclose to a police officer the name and address of the maker: fine up to six hundred rupees. Sub-section (3) presumes, until the contrary is proved, that a person whose name appears on such a document caused it to be made.

Sections 183 to 185, misuse of revenue stamps. Section 183 punishes fraudulently, or with intent to cause loss to Government, removing or effacing a writing or document for which a stamp has been used, or removing a used stamp so that it may be used again: up to three years, or fine, or both. Section 184 punishes fraudulently, or with intent to cause loss to Government, using a revenue stamp known to have been used before: up to two years, or fine, or both. Section 185 punishes erasing or removing the mark denoting that a stamp has been used, or possessing, selling or disposing of a stamp from which such a mark has been erased, or selling a stamp known to have been used: up to three years, or fine, or both.

Section 186, fictitious stamps. Making, uttering, dealing in or selling a fictitious stamp, using one for a postal purpose, possessing one without lawful excuse, or making or possessing without lawful excuse the die, plate, instrument or materials for making one: fine up to two hundred rupees. Sub-section (2) provides for seizure and forfeiture. Sub-section (3) defines a fictitious stamp as one falsely purporting to be issued by Government to denote a rate of postage, or any facsimile, imitation or representation of such a stamp. Sub-section (4) extends the meaning of "Government" for postage stamps to the persons authorised by law to administer executive government in any part of India or in any foreign country.

Section 187, mint employees. A person employed in a mint who causes a coin to be of a different weight or composition from that fixed by law.

Section 188. Unlawfully taking a coining instrument from a mint.

Broken down: what counterfeiting includes

The Explanation to section 178 is far wider than "making a fake".

Altering a genuine article counts. Causing a genuine stamp of one denomination to appear like another denomination is counterfeiting a Government stamp. Causing a genuine coin to appear like a different coin, intending deception, is counterfeiting a coin.

Damaging a coin counts. The offence includes diminishing the weight of a coin, altering its composition, or altering its appearance. Clipping the metal from the edge of a coin is counterfeiting.

The definitions are not confined to Indian money. A bank-note issued by a person carrying on banking anywhere in the world is within the definition, and so is a coin issued by any State or Sovereign Power. Counterfeiting foreign currency in India is an offence here.

Distinctions that carry marks

A worked example

Vinayak buys a printer and paper and begins producing notes resembling five hundred rupee currency notes in a room in Ulhasnagar.

Which offences? Section 178 for the counterfeiting itself, punishable with imprisonment for life or up to ten years and fine. Section 181 for possessing the machinery and materials for the purpose, which carries the same punishment and is complete before a single note is printed.

He gives a hundred notes to Sanjay to pass in shops. Sanjay is within section 179, using as genuine and trafficking in counterfeit notes, knowing them to be counterfeit, and faces the same life or ten years.

A shopkeeper who is given one, realises what it is, and keeps it to pass on. He is within section 180: possession, knowing or having reason to believe the note counterfeit, intending it to be used as genuine, up to seven years, or fine, or both.

A shopkeeper who takes one innocently and hands it to the police. No offence. Section 180 requires both the knowledge and the intention that it be used as genuine.

Change the article. Suppose Vinayak instead prints an advertising leaflet designed to look like a currency note. That is section 182, and the maximum is a fine of three hundred rupees. If his name appears on it, sub-section (3) presumes he caused it to be made unless he proves the contrary, and if he refuses without lawful excuse to tell the police who printed it, sub-section (2) adds a fine of up to six hundred rupees.

Change it again. Suppose a clerk peels a used revenue stamp off an old agreement, removes the cancellation mark and affixes it to a fresh document. Section 185 covers erasing the mark, up to three years; section 184 covers using a stamp known to have been used before, up to two years; and section 183 covers removing the stamp from the writing for which it was used, up to three years.

And once more. Suppose an employee of a mint deliberately produces coins with less silver than the law prescribes. That is section 187, which exists because such a person can do the harm from inside.

What beginners get wrong

Thinking counterfeiting means making something from nothing. Altering a genuine coin or stamp so that it appears to be a different one is counterfeiting under the Explanation to section 178.

Thinking possession alone is enough under section 180. It is not. Knowledge or reason to believe, and the intention that the article be used as genuine, are both required.

Thinking foreign money is outside the sections. It is not. The definitions of bank-note and coin extend to notes issued by bankers anywhere in the world and coins issued by any State or Sovereign Power.

Confusing section 182 with counterfeiting. A document that merely resembles a note, without being passed as one, is a three hundred rupee matter, not a life sentence.

Limits and criticism

The fines are museum pieces. Three hundred rupees, six hundred rupees and two hundred rupees were meaningful sums in 1860 and are meaningless now, and the Sanhita re-enacted them unchanged.

Section 186 is about postage stamps in an age that barely uses them, and it occupies a section of the general penal code while more modern instruments of value, such as prepaid electronic vouchers, are left to be squeezed into "valuable security" or the property offences.

The presumption in section 182(3) reverses the burden on authorship for an offence punishable only with a fine, which is a heavy device for a light offence.

The merger of two chapters left the punishments uneven. Counterfeiting a revenue stamp attracts imprisonment for life under section 178, while misusing one under sections 183 to 185 attracts two or three years, and the gap between altering a stamp's denomination and re-using a cancelled one is very wide for conduct that costs the revenue the same.

Quick revision

Section 178. Counterfeiting coin, revenue stamp, currency-note or bank-note: life, or ten years, and fine. Explanation: bank-note and coin defined widely, including foreign issues; altering a denomination or a coin's appearance, weight or composition is counterfeiting.

Section 179. Trafficking in or using as genuine, knowing or having reason to believe: life, or ten years, and fine.

Section 180. Possession with knowledge and intent that it be used as genuine: seven years, or fine, or both.

Section 181. Machinery, dies, instruments or materials: life, or ten years, and fine.

Section 182. Documents resembling notes: fine up to three hundred rupees; refusal to name the maker, six hundred; presumption of authorship in sub-section (3).

Sections 183, 184, 185. Removing a stamp or its writing, three years; using a stamp known to be used, two years; erasing the used mark, three years.

Section 186. Fictitious postage stamps: fine up to two hundred rupees, with seizure and forfeiture.

Sections 187 and 188. Mint employee causing a coin of wrong weight or composition; unlawfully taking a coining instrument from a mint.

Test yourself

1. Give three things the Explanation to section 178 treats as counterfeiting. Any three of: causing a genuine stamp of one denomination to appear like a stamp of a different denomination; causing a genuine coin to appear like a different coin, intending deception or knowing it likely; diminishing the weight of a coin; altering its composition; and altering its appearance.

2. What must be proved under section 180 besides possession? Knowledge or reason to believe that the article is forged or counterfeit, and the intention that it be used as genuine or that it may be used as genuine.

3. Does the Sanhita protect foreign currency? Yes. A bank-note includes one issued by any person carrying on the business of banking in any part of the world, and a coin includes metal stamped and issued by or under the authority of any State or Sovereign Power.

4. What is the punishment for making a document that merely resembles a currency note? A fine which may extend to three hundred rupees under section 182(1), with a further fine of up to six hundred rupees under sub-section (2) for refusing without lawful excuse to tell a police officer who made it.

5. Which offence in this group is complete before a single counterfeit article exists? Section 181, making, mending, buying, selling, disposing of or possessing machinery, a die, an instrument or material for the purpose of forging or counterfeiting, which carries imprisonment for life or up to ten years and fine.