Calcutta High Court Clarifies When Possession Of Fake Currency Amounts To 'Trafficking', Rejects Automatic Presumption U/S 489B IPC

A Larger Bench of the Calcutta High Court has held that mere possession of Fake Indian Currency Notes (FICN), regardless of quantity, does not automatically amount to “trafficking”, nor does it justify drawing any statutory presumption against the accused under Section 489B IPC. The Court clarified that mens rea remains central, and the prosecution must independently establish that the accused had knowledge of the counterfeit nature of the notes and intended to use, circulate, or traffic them.Multiple criminal appeals concerning the recovery of FICN raised recurring questions on the use of presumptions, the meaning of “otherwise traffics in”, and the evidentiary burden on the accused under Section 106 of the Evidence Act. Conflicting earlier decisions where large-volume seizures were treated as proof of trafficking prompted a reference to a Larger Bench comprising Justices Debangsu Basak, Jay Sengupta, and Tirthankar Ghosh, which heard a batch of appeals involving diverse factual scenarios, including recoveries from civilians as well as law enforcement personnel.No automatic presumption of trafficking due to mere possession The bench observed that Sections 489B and 489C IPC contain no statutory presumption, unlike special statutes such as the NDPS Act. Therefore, courts cannot automatically infer that possession of counterfeit notes—however substantial—amounts to “trafficking” or an attempt to circulate them. The judgment underscored that “otherwise traffics in” cannot be read as a catch-all phrase, and requires some overt act, conduct, or circumstances showing movement, circulation, or intended distribution of the fake currency. Simply carrying notes, without more, does not satisfy the ingredients of Section 489B.Quantity alone cannot determine guilt Rejecting the idea of a “cut-off” volume, the Court held that the quantity of FICN is only a circumstance, not a determinant. While large volume may raise suspicion, suspicion cannot replace the statutory requirement of proving knowledge and intention. The Bench stressed that the prosecution must first establish foundational facts—such as conscious possession, circumstances indicating movement or transfer, and a credible chain of custody—before the burden can shift to the accused. Quantity, by itself, does not justify invoking Section 106 Evidence Act to compel the accused to explain possession.Recovery from security personnel does not affect legal requirementsThe Court dismissed the argument that recovery from police, CISF or armed forces personnel automatically indicates trafficking, holding that no separate evidentiary rule applies to security personnel. The IPC does not classify offenders by vocation, and constitutional guarantees prohibit courts from creating extra-legal classes of offenders. The same standard of proof applies irrespective of the accused's profession.High-quality counterfeit notes do not automatically invoke Section 489BA key issue concerned whether recovery of High Quality Counterfeit Notes (HQCN) as defined under the UAPA, 1967, automatically attracted Section 489B IPC. The Bench held that UAPA's standards, thresholds and sanctions regime cannot be imported into IPC prosecutions, and expert certification that notes meet HQCN parameters does not, by itself, prove trafficking. Unless the prosecution independently proves intent to circulate or use the notes as genuine, Section 489B cannot be applied.Reiterating the Supreme Court's rulings in Umashanker and M. Mammutti, the Court held that mens rea is indispensable for conviction under both Sections 489B and 489C. Courts must look for evidence showing that the accused knew the notes were counterfeit and intended to use them as genuine. Failure to put such incriminating circumstances to the accused under Section 313 CrPC also vitiates the conviction.Case: Anikul @ Anikul Islam & Anr. vs. The State of West BengalCase No: C.R.A. 123 of 2019Click here to read order

Calcutta High Court Clarifies When Possession Of Fake Currency Amounts To 'Trafficking', Rejects Automatic Presumption U/S 489B IPC

Srinjoy Das

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