Sections 489A–489E IPC vs Sections 178–182 BNS — Counterfeit Currency-Notes and Bank-Notes

In India, Sections 178 to 182 of the Bharatiya Nyaya Sanhita, 2023 (BNS) replaced the currency-note offences in Sections 489A to 489E of the Indian Penal Code, 1860 (IPC) on 1 July 2024. Punishments are unchanged except higher fines in Section 182; possession under Section 180 is now non-bailable and gains a lawful-source Explanation.

At a glance

The CrPC First Schedule listed Sections 489A, 489B and 489D IPC as cognizable, non-bailable and triable by the Court of Session; Section 489C as cognizable, bailable and triable by the Court of Session; and both limbs of Section 489E as non-cognizable, bailable and triable by any Magistrate.

What changed

• Modified — Section 180 BNS (IPC 489C), bail: the section's punishment is the same (up to seven years, or fine, or both), but the BNSS First Schedule lists it as non-bailable. The CrPC First Schedule listed Section 489C as bailable. This is the most significant practical change in the group.
• New — Explanation to Section 180: "If a person establishes the possession of the forged or counterfeit coin, stamp, currency-note or bank-note to be from a lawful source, it shall not constitute an offence under this section." Section 489C had no such Explanation.
• Modified — Section 182 BNS (IPC 489E): the fine in sub-section (1) rises from "one hundred rupees" to "three hundred rupees" and in sub-section (2) from "two hundred rupees" to "six hundred rupees". Drafting edits: "police-officer" becomes "police officer", and in sub-section (3) "presumed that that person" becomes "presumed that the person".
• Expanded — Section 179 BNS (IPC 489B): the list of acts opens with "imports or exports" and adds "delivers to"; "traffics in or uses" becomes "traffics or uses". Punishment is unchanged.
• Expanded — Section 181 BNS (IPC 489D): "makes, or performs any part of the process of making" becomes "makes or mends, or performs any part of the process of making or mending", and "any machinery, instrument or material" becomes "any machinery, die, or instrument or material". Punishment is unchanged.
• Expanded — Section 178 BNS (IPC 489A): the words and punishment for currency-notes and bank-notes are the same, but the section now also covers "any coin" and any "stamp issued by Government for the purpose of revenue".
• Minor edit — definition of "bank-note": the Explanation that was attached to Section 489A "for the purposes of this section and of sections 489B, 489C, 489D and 489E" is now Explanation (1) to Section 178 and applies "For the purposes of this Chapter". The words of the definition are the same.
• Structure: the IPC placed Sections 489A to 489E at the end of Chapter XVIII (documents and property marks), under the heading "Of currency-notes and bank-notes" added in 1899, while coin and stamp offences sat in Chapter XII (Sections 230 to 263A). The BNS joins them in Chapter X. One consequence for coin, on the text: counterfeiting any coin now carries the Section 178 punishment, while Section 231 IPC (counterfeiting coin) carried up to seven years and fine and only Section 232 IPC (counterfeiting Indian coin) carried imprisonment for life or up to ten years. The coin and stamp offences are not covered further on this page.

Statutory text (relevant extract)

Extract, Section 489C IPC (repealed from 1 July 2024):

Whoever has in his possession any forged or counterfeit currency-note or bank-note, knowing or having reason to believe the same to be forged or counterfeit and intending to use the same as genuine or that it may be used as genuine, shall be punished with imprisonment of either description for a term which may extend to seven years, or with fine, or with both.

Extract, Section 180 BNS with its Explanation:

Whoever has in his possession any forged or counterfeit coin, stamp, currency-note or bank-note, knowing or having reason to believe the same to be forged or counterfeit and intending to use the same as genuine or that it may be used as genuine, shall be punished with imprisonment of either description for a term which may extend to seven years, or with fine, or with both.

Explanation.—If a person establishes the possession of the forged or counterfeit coin, stamp, currency-note or bank-note to be from a lawful source, it shall not constitute an offence under this section.

Extract, Section 178 BNS, Explanation (1):

(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;

How it works — the ingredients

"Counterfeit" (Section 2(4) BNS). A person counterfeits who causes one thing to resemble another, intending by that resemblance to practise deception or knowing deception to be likely. Explanation 1: the imitation need not be exact. Explanation 2: where the resemblance is such that a person might be deceived, intent or knowledge is presumed until the contrary is proved. The same definition was Section 28 IPC.

Counterfeiting (Section 178). Either counterfeiting a note, or "knowingly" performing any part of the process. A person who prints one stage of the job knowing its purpose is covered even if someone else finishes it.

Using as genuine (Section 179). (1) One of the listed acts — import, export, sale, delivery, purchase, receipt, other trafficking, or use as genuine; (2) the note is forged or counterfeit; (3) the accused knew or had reason to believe it to be forged or counterfeit.

Possession (Section 180). (1) Possession; (2) of a forged or counterfeit note; (3) knowledge or reason to believe that it is forged or counterfeit; and (4) intent to use it as genuine, or that it may be used as genuine. Ingredients (3) and (4) are cumulative. The Explanation then takes possession "from a lawful source" out of the section where the person establishes that source; on a reading of the words "If a person establishes", the burden of showing the lawful source is on the person who relies on it.

Instruments and materials (Section 181). Making, mending or possessing machinery, a die, an instrument or material, either for the purpose of forging or counterfeiting, or knowing or having reason to believe it is intended for that use. The offence is complete without any counterfeit note being produced.

Resembling documents (Section 182). Sub-section (1) needs no intent to deceive: making, causing to be made, using "for any purpose whatsoever" or delivering a document that purports to be, resembles, or so nearly resembles as to be calculated to deceive, a currency-note or bank-note. Sub-section (2) punishes a person whose name appears on such a document and who, without lawful excuse, refuses to tell a police officer who printed it. Sub-section (3) allows a presumption, until the contrary is proved, that a person named on the document caused it to be made.

What this means in practice

For the accused and defence advocate

• Sections 178, 179, 180 and 181 are all non-bailable and triable by the Court of Session. For possession, which was bailable under the CrPC, bail is now a matter for the court's discretion.
• Section 180 carries a seven-year maximum and no life term, so Section 479(1) BNSS applies: a person who has "undergone detention for a period extending up to one-half of the maximum period of imprisonment" is to be released on bail (on a reading, three and a half years), and a first-time offender is to be released on bond after "one-third". Sections 178, 179 and 181 specify imprisonment for life as one of the punishments, so Section 479(1) does not apply to them.
• The mental element is the defence's main ground. Umashankar (below) set aside convictions where the prosecution brought no material on knowledge or reason to believe. For possession charged under Section 180, evidence of a lawful source goes to the new Explanation.

For the investigating officer and prosecutor

• Record the circumstances that show knowledge or reason to believe — the number of notes, identical serial numbers, the place of recovery, materials found — because in Umashankar use and recovery of fake notes without material on knowledge did not sustain the convictions.
• Section 33(1)(v) BNSS requires every person aware of the commission of, or intention to commit, an offence under Sections 178 to 182 to inform the nearest Magistrate or police officer, in the absence of reasonable excuse. Section 129(d) BNSS lets an Executive Magistrate require security for good behaviour from a person who habitually commits offences under Sections 178 to 181. The CrPC equivalents (Sections 39(1)(xii) and 110(d)) referred to Sections 489A to 489E and 489A to 489D.

Related offences to check

• Section 111(1) BNS lists "counterfeiting of currency-notes, bank-notes and Government stamps" as an economic offence within organised crime.
• Section 113(1)(a)(iv) BNS covers acts done with the intent to threaten, or likely to threaten, the economic security of India that cause or are likely to cause damage to monetary stability "by way of production or smuggling or circulation of counterfeit Indian paper currency, coin or of any other material"; its Explanation (b) defines "counterfeit Indian currency" by reference to examination by an authorised or notified forensic authority.

Judgments that still matter

State of Kerala v. Mathai Verghese & Ors., [1987] 1 S.C.R. 317 (1986 INSC 243) — 19 November 1986. The Sessions Court discharged accused charged with counterfeiting US $20 notes, holding that Sections 489A and 489C IPC applied only to Indian currency notes; the High Court confirmed the discharge. M. P. Thakkar and S. Natarajan JJ. (judgment by Thakkar J.) held that the expression "currency note" is "large enough in its amplitude to cover the currency notes of 'any' country", that a US dollar bill is in any case a "bank-note" within the Explanation to Section 489A because it is issued "under the authority of any State or Sovereign Power", and that the definition in the Indian Paper Currency Act could not be imported into Sections 489A to 489E. The Court reversed the discharge and sent the case back to the trial court. The report shows no paragraph numbers. The definition construed is repeated in Explanation (1) to Section 178 BNS.

Umashankar v. State of Chhattisgarh, [2001] Supp. 3 S.C.R. 646 — 5 October 2001. The appellant, said to be an 18-year-old student at the time, was convicted under Sections 489B and 489C IPC after paying for mangoes with a note found to be fake and having 13 more recovered from him. Syed Shah Mohammed Quadri and S. N. Phukan JJ., in an order of the Court, held that the mens rea of both offences is "knowing or having reason to believe the currency-notes or bank notes to be forged or counterfeit", and that without it using or possessing such notes is not enough; the provisions "are not meant to punish unwary possessors or users". Finding no material on the appellant's knowledge, and that no specific question about the notes being fake was put to him under Section 313 CrPC, the Court set aside the convictions and acquitted him. The report shows no paragraph numbers. Sections 179 and 180 BNS repeat the words construed.

No Supreme Court judgment applying Sections 178 to 182 BNS was read for this page.

Which law applies to your case

Section 358(2) BNS keeps alive any penalty or punishment incurred under the IPC and allows proceedings to be instituted, continued or enforced "as if that Code had not been repealed"; on a reading of that provision, a currency-note offence committed before 1 July 2024 is charged under Sections 489A to 489E IPC. Investigations and trials pending on that date continue under the CrPC (Section 531(2)(a) BNSS). Article 20(1) of the Constitution bars a penalty greater than the law in force at the time of the offence, so, on a reading of that Article, the higher fines in Section 182 BNS cannot be imposed for earlier conduct. See which law applies to an offence before 1 July 2024.

Frequently asked questions

What is the BNS equivalent of Section 489B and Section 489C IPC? Section 179 of the Bharatiya Nyaya Sanhita, 2023 replaces Section 489B IPC (using forged or counterfeit notes as genuine), and Section 180 BNS replaces Section 489C IPC (possession). Section 179 carries imprisonment for life or up to ten years, and fine; Section 180 carries up to seven years, or fine, or both. Both sections now also cover coin and Government stamps.

Is possession of fake currency notes bailable under the BNSS? No. The First Schedule to the Bharatiya Nagarik Suraksha Sanhita, 2023 lists possession of forged or counterfeit coin, Government stamp, currency-notes or bank-notes under Section 180 BNS as cognizable, non-bailable and triable by the Court of Session. The CrPC First Schedule listed possession under Section 489C IPC as bailable, so this has changed.

Is it an offence if I received a fake note without knowing it was fake? Sections 179 and 180 BNS require that the person knew or had reason to believe the note to be forged or counterfeit, and Section 180 also requires intent to use it, or that it may be used, as genuine. In Umashankar v. State of Chhattisgarh ([2001] Supp. 3 S.C.R. 646), the Supreme Court held that without that mental element, using or possessing a counterfeit note does not make out Section 489B or 489C IPC. Section 180 BNS now adds that possession established to be from a lawful source is not an offence.

Do the BNS counterfeiting offences cover foreign currency? The definition of 'bank-note' in Explanation (1) to Section 178 BNS includes a note or engagement for payment of money to bearer on demand issued by or under the authority of any State or Sovereign Power and intended to be used as money. In State of Kerala v. Mathai Verghese ([1987] 1 S.C.R. 317), the Supreme Court held that the same words in Section 489A IPC cover US dollar notes and that 'currency note' is not limited to Indian notes.

What changed for documents that resemble currency notes? Section 182 BNS repeats Section 489E IPC but raises the fines. Making, using or delivering a document resembling a currency-note or bank-note is punishable with fine up to three hundred rupees, against one hundred under the IPC, and refusing to disclose the printer's name and address to a police officer is punishable with fine up to six hundred rupees, against two hundred.

Can a counterfeit currency case be compromised? No. None of Sections 178 to 182 BNS appears in the compounding tables in Section 359 of the Bharatiya Nagarik Suraksha Sanhita, 2023, and none of Sections 489A to 489E IPC appeared in Section 320 CrPC.

Which law applies to a counterfeit note case from before 1 July 2024? Section 358(2) BNS saves any penalty incurred under the IPC and lets proceedings continue as if it had not been repealed, so, on a reading of that text, an offence committed before 1 July 2024 is charged under Sections 489A to 489E IPC. Pending investigations and trials continue under the CrPC by Section 531(2)(a) BNSS, and Article 20(1) of the Constitution bars a penalty greater than the law in force at the time of the offence.

Related

• IPC to BNS master table
• Forgery, false documents and counterfeit seals: IPC 463-474 vs BNS 335-341
• Organised crime — BNS 111
• Terrorist act — the BNS definition
• Undertrial release after one-third or one-half — BNSS 479 vs CrPC 436A
• Offence before 1 July 2024 — which law applies

Sources

• Bharatiya Nyaya Sanhita, 2023 (Gazette text): Sections 2(4), 111(1) Explanation (iii), 113(1)(a)(iv) and Explanation (b), 178 to 185, and 358.
• Indian Penal Code, 1860 (India Code text): Sections 28, 230 to 232, 255 and 489A to 489E, with the amendment footnotes.
• Bharatiya Nagarik Suraksha Sanhita, 2023 (Gazette text): Sections 33, 34, 129, 359, 479 and 531, and the First Schedule entries for Sections 178 to 182 BNS.
• Code of Criminal Procedure, 1973: Sections 39, 110 and 320, and the First Schedule entries for Sections 489A to 489E IPC.
• Constitution of India: Article 20(1).
• Judgments read in full text: State of Kerala v. Mathai Verghese (1987_1_317_326_EN.md); Umashankar v. State of Chhattisgarh (S_2001_3_646_649_EN.md).

This page explains the statutory text and the judgments cited as they stand. It is not legal advice; for a specific case, consult an advocate.