Whoever counterfeits, or knowingly performs any part of the process of counterfeiting, any coin, stamp issued by Government for the purpose of revenue, currency-note or bank-note, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.
Explanation.—For the purposes of this Chapter,—
(1) the expression “bank-note” means a promissory note or engagement for the payment of money to bearer on demand issued by any person carrying on the business of banking in any part of the world, or issued by or under the authority of any State or Sovereign Power, and intended to be used as equivalent to, or as a substitute for money;
(2) “coin” shall have the same meaning as assigned to it in section 2 of the Coinage Act, 2011 (11 of 2011) and includes metal used for the time being as money and is stamped and issued by or under the authority of any State or Sovereign Power intended to be so used;
(3) a person commits the offence of “counterfeiting Government stamp” who counterfeits by causing a genuine stamp of one denomination to appear like a genuine stamp of a different denomination; (4) a person commits the offence of counterfeiting coin who intending to practise deception, or knowing it to be likely that deception will thereby be practised, causes a genuine coin to appear like a different coin; and
(5) the offence of “counterfeiting coin” includes diminishing the weight or alteration of the composition, or alteration of the appearance of the coin.
Simplified Explanation
This section outlines the offense of counterfeiting various forms of government-issued financial instruments, including coins, government stamps, currency-notes, and bank-notes.
Key Provisions
- Offense Description:
- A person who counterfeits (i.e., makes a fraudulent copy of) or knowingly participates in any part of the process of counterfeiting the following shall be punished:
- Coin
- Government stamps issued for revenue purposes
- Currency-notes
- Bank-notes
- The punishment for committing this offense is:
- Imprisonment for life, or
- Imprisonment of either description for up to ten years, and
- Fine.
- A person who counterfeits (i.e., makes a fraudulent copy of) or knowingly participates in any part of the process of counterfeiting the following shall be punished:
- Explanation of Terms: The section further clarifies what constitutes counterfeiting in relation to each item:
- Bank-note:
- A promissory note or any document issued by a person engaged in banking or by any State or Sovereign Power, promising to pay a sum of money to the bearer on demand. The note is meant to be used as a substitute for money.
- Coin:
- Refers to metal used as money, which is stamped and issued by the authority of any State or Sovereign Power.
- The definition of coin aligns with the Coinage Act, 2011, and includes metal coins used as currency.
- Counterfeiting Government Stamp:
- A person is guilty of counterfeiting a government stamp if they cause a genuine stamp of one denomination to appear like a stamp of a different denomination.
- Counterfeiting Coin:
- A person commits this offense by altering the appearance of a coin or diminishing its weight or changing its composition, with the intent to deceive or knowing it will likely cause deception.
- Bank-note:
Detailed Explanation of Offenses
- Counterfeiting Coins:
- Counterfeiting a coin can involve actions such as:
- Altering the weight or composition of a coin.
- Changing the appearance of a coin to make it resemble another coin, typically of higher value.
- The goal is to deceive others into accepting the altered coin as genuine currency.
- Counterfeiting a coin can involve actions such as:
- Counterfeiting Government Stamps:
- This occurs when a person creates a fake government stamp or alters a genuine stamp to make it appear as though it represents a different denomination, thus defrauding the public or government.
- Counterfeiting Currency-Notes or Bank-Notes:
- Creating fake currency-notes or bank-notes, or knowingly participating in the counterfeiting process, is treated as a serious offense. The counterfeit notes could be of any denomination, with the intent to pass them as legal tender.
Punishment
- Imprisonment:
- The offender may face imprisonment for life, or if sentenced for a specific term, it may extend to ten years.
- Fine:
- In addition to imprisonment, the individual will be subject to fine.
Purpose and Rationale
- Preventing Financial Fraud:
- Counterfeiting undermines the integrity of a nation’s financial system. The counterfeiting of coins, currency, or stamps disrupts trade, causes economic instability, and diminishes trust in the currency.
- Protection of Legal Tender:
- This provision aims to protect the legal tender used in the country, ensuring that coins, currency-notes, and stamps remain authentic and unaltered in circulation.
- Deterrence:
- The severe punishment—including life imprisonment and significant fines—serves as a strong deterrent against counterfeiting activities. The law seeks to prevent people from engaging in activities that could destabilize the monetary system.
Examples of Offenses Under This Section
- Counterfeiting Coins:
- An individual alters a genuine coin by reducing its weight or changing its material composition, and then circulates it in the market as a higher-value coin, intending to deceive buyers or traders.
- Manufacturing Fake Currency-Notes:
- A group of individuals engages in the production of fake currency-notes and attempts to pass them off as real during transactions, thereby committing the offense of counterfeiting.
- Counterfeiting Government Stamps:
- A person creates forged government stamps or alters existing stamps to make them appear as higher denominations, which they attempt to use for official transactions or selling them to others.
Conclusion
Section 178 of the Bharatiya Nyaya Sanhita 2023 treats counterfeiting of coins, government stamps, currency-notes, or bank-notes as a serious criminal offense. The severe penalties—including life imprisonment and fines—are meant to deter individuals from engaging in fraudulent activities that could destabilize the economy and undermine public trust in the monetary system. The section’s provisions ensure that individuals involved in any part of the counterfeiting process are held accountable, safeguarding the integrity of the financial system.
