Dr.

Ram Manohar Lohiya National Law University,

2015

Criminal Law I

Final Project
on

Case Comment on

Umashankar v. State of Chhattisgarh

SUBMITTED TO: SUBMITTED BY:

Dr. KUMAR ASKAND PANDEY SANDESH NIRANJAN

Asst. Professor of Law Roll NO. 115 Sec. B

Dr. RML National Law University B.A.L.L.B . III Sem.

 Acknowledgement

A major research project like this is never the work of anyone alone. As one if
can accomplish nothing, this report is not an exception. We would like to have
some space to acknowledge some of them that frequently fade in to
background.

Firstly, I would like to thank respected Assistant Professor Mr. Dr.K.A.Pandey,

for giving me such a golden opportunity to show my skills and capability
through this project. His excellent supervision, invaluable suggestion and
exhorting guidance had helped me to complete the project successfully.

This project is the result of the extensive ultrapure study, hard work and labour,
put into to make it worth reading. This project has been completed through the
generous co-operation of various persons, especially my seniors, who, in their
different potentials helped me a lot in giving the finishing touch to the project.

This project couldn’t be completed without the help of my university’s library

Dr. Madhu Limaye Library and the internet facility in the campus.

Thank you.

SANDESH NIRANJAN
 Introduction-

“Men make counterfeit money ; in many more cases, money make counterfeit men.”
( Sydney J. Harris)

“In the present case (Umashanker v. State of Chhattisgarh; AIR 2001 SC 3074), the aim of the
project is to highlight, how the Supreme Court interpreted the words of section 489A, 489B and
489C of Indian Penal code; section 4 of Indian Evidence Act and section 313 of Code of Criminal
Procedure. And how the Court pointed the object of the legislature in enacting these provisions.”

The allure of counterfeiting is obvious. If one could do it without getting caught, he would be able
to print his own money and buy whatever he want with it. Counterfeiting is the ultimate technology
for people who want to get something for nothing.
Our Penal Code attributes some of the acts as criminal offences relating to counterfeiting and
defines it in section 28, as an act which causes one thing to resemble another, intending by means of
that resemblance to deceive.
Herein, this case comment we will come to know that mere counterfeiting or possession of
counterfeit currency and using it as genuine would not render any liability on the accused but it is
on the prosecution to prove beyond reasonable doubt that the accused had either ‘knowledge’ or
‘reasons to believe’ that the currency note or bank note was forged.
The words ‘knowledge' and ‘having reasons to believe’ comes from the domain of mens rea which
is defined in Latin maxim actus non facit reum nisi mens sit rea. This maxim literally means that:
“an act does not make a man a criminal unless the mind be guilty”. Initially mens rea was based on
moral blameworthiness and as the evolution of judicial process took place, much sharper and
precise lines were drawn as to ascertain exact mental requisites for various crimes and also
recognising general defences to criminal liability.

Case: Umashanker v. State of Chhattisgarh.

Citation: AIR 2001 SC 3074.
Date of Decision: October 5, 2001.
Bench: Syed Shah Mohammed Quadri and S. N. Phukan.
Advocates who appeared in this case:
Pramod Swarup, Ms Pareena Swarup and Parveen Swarup, Advocates for Appellant
Ms Gitanjali Mohan and Prakash Shrivastava, Advocates for Respondent
Facts:

Umashanker, an 18 year old student, at about 10 p.m. in the evening on May 25, 1990 went to buy
mangoes. He purchased 1 k.g. of mango costing Rs. 5 and tendered a note of Rs. 100. The lady(PW
4) at the shop doubted its genuineness as it being the highest denomination in use and called her
husband (PW 2) who examined and said the note was fake. Some neighbouring shopkeepers(PW7)
were also called upon to re-examine the currency-note who also said it was a fake currency-note.
Police was called upon the scene and Umashanker was handed over to them. On further search by
Police personnel 13 more such forged currency-notes , some papers, one coloured refill and scissors
were discovered from his house. On these facts charges were framed against him under Sections
489-A, 489-B and 489-C of I.P.C. He was convicted by trail court which further in appeal was
upheld by High Court. On further appeal in Criminal Appeal no. 1024 of 2001, the matter is before
the Supreme court.

Decision of the Court:

1. The convict in Session Trial No. 26 of 1991 on the file of the learned VI Additional
Sessions Judge, Bilaspur, under Sections 489B and 489C of the Indian Penal Code (for
short, “I.P.C.”) who was sentenced to three years' rigorous imprisonment on each count, is in
appeal from the judgment of the High Court of Madhya Pradesh at Jabalpur in Criminal
Appeal No. 39 of 1992, allowing it in part on November 11, 1999. The High Court upheld
the conviction but reduced the sentence from three years' rigorous imprisonment to two
years' rigorous imprisonment under Section 489B and one year's rigorous imprisonment
under Section 489C.

2. Heard Mr. Pramod Swarup, the learned counsel appearing with Mr. Praveen Swarup,
Advocate-on-Record for the appellant and Ms. Gitanjali Mohan, the learned counsel
appearing with Mr. Prakash Shrivastava, Advocate-on-Record for the respondent-State.

3. The gravamen of the charge against the appellant is that on May 25, 1990 at about 10 p.m.
having purchased one kilo gram of mango costing Rs. 5/- he paid a fake currency-note of
Rs. 100/- to P.W. 4 who doubted its genuineness. She showed it to P.Ws. 2 and 7 who also
said that it was a fake currency-note. He was handed over to police who recovered 13 more
such fake currency-notes from him. Further some papers, refills of different colours and
scissors were also recovered from his house. On these facts charges were framed against
him under Section 489A, 489B and 489C of I.P.C.

4. After considering the evidence on record the learned trial judge acquitted him of charge
under Section 489A but found him guilty of charges under Sections 489B and 489C of I.P.C.
and sentenced him for the periods noted above. On appeal the High Court confirmed the
conviction but reduced the sentence, afore-mentioned.

5. The conviction of the appellant by the trial court as confirmed by the High Court is under
Section 489B and Section 489C of I.P.C., which read as under:
"489-B. Using as genuine, forged or counterfeit currency-notes or bank-notes.-Whoever
sells to, or buys or receives from, any other person or otherwise traffics in or uses as
genuine, any forged or counterfeit currency-note or bank-note, knowing or having reason to
believe the same to be forged or counterfeit, 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.
489-C. Possession of forged or counterfeit currency notes or bank-notes.-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."

6. Sections 489-A to 489-E deal with various economic offences in respect of forged or
counterfeit currency-note or bank-notes. The object of Legislature in enacting these
provisions is not only to protect the economy of the country but also to provide adequate
protection to currency-notes and bank-notes. The currency-notes are, inspite of growing
accustomedness to the credit cards system, still the backbone of the commercial transactions
by multitudes in our country. But these provisions are not meant to punish unwary
possessors or users.

7. A perusal of the provisions, extracted above, shows that mens rea of offences under
Sections 489B and 489C is, "knowing or having reason to believe the currency-notes or
bank-notes are forged or counterfeit". Without the aforementioned mens rea selling, buying
or receiving from another person or otherwise trafficking in or using as genuine forged or
counterfeit currency-notes or bank-notes, is not enough to constitute offence under Section
489B of I.P.C. So also possessing or even intending to use any forged or counterfeit
currency-notes or bank-notes is not sufficient to make out a case under Section 489C in the
absence of the mens rea, noted above. No material is brought on record by the prosecution to
show that the appellant had the requisite mens rea. The High Court, however, completely
missed this aspect The learned trial judge on the basis of the evidence of P.W. 2, P.W. 4 and
P.W. 7 that they were able to make out that currency-note alleged to have been given to P.W.
4, was fake "presumed" such a mens rea. On the date of the incident the appellant was said
to be 18 years old student. On the facts of this case the presumption drawn by the trial court
is not warranted under Section 4 of the Evidence Act. Further it is also not shown that any
specific question with regard to the currency-noted being fake on counterfeit was put to the
appellant in his examination under Section 313 of Criminal Procedure Code. On these facts
we have no option but to hold that the charges framed under Sections 489B and 489C are
not proved. We, therefore, set aside the conviction and sentence passed on the appellant
under Sections 489B and 489C of I.P.C. and acquit him of the said charges [see: M.
Mammutti Vs. State of Karnataka1 ].

8. Accordingly, the order under challenge of the High Court dated November 2, 1999 in
Criminal Appeal No. 39 of 1992 is set aside and the appellant is acquitted of the charges
framed against him.

9. The appeal is thus allowed.

Case Comment-

This comment will argue that the object of the legislation as pointed out by the learned
judges is to provide the protection to economy and currency of the state. The manifest
purpose of the provision is to protect people from being deceived or cheated by ensuring
that a person accepting a currency-note is given a genuine currency, which can be
exchanged for goods or services and not a worthless piece of paper which will bring nothing

1 1979 4 SCC 723

in return. Therefore, in State of Kerala v. Mathai Verghese,2 Supreme Court held that the
counterfeiting of currency-notes not only of India but of foreign countries as well,
constitutes offences under s. 489A, IPC. The word ‘counterfeit’ has not only been defined in
s. 28, IPC, in very wide terms, but a rule of evidence has also been prescribed in explanation
thereto, so as to draw an adverse presumption against the maker of the counterfeit article.3

This comment will argue that although the object of the legislation has been defined tightly,
the unwary possessors or users must not punished. As this issue is related to circulation of
money which forms the basis for survival of the individuals who directly or indirectly comes
in contact by either selling or buying or simply in possession of the money.Therefore these
innocent individuals who without any intention to use the counterfeit currency as genuine
must not be penalised.

This comment will counter argue the issue advanced by prosecution, as the PW2 , PW4 and
PW7 were able to make out that the currency given to PW4 was fake, therefore it must be
‘presumed’ that the accused had that guilty mind to use it as genuine which would amount to
the ‘knowledge’ of the counterfeit currency. PW2, PW4 and PW7 being shopkeeper would
deal in money on daily basis, it would not be hard for them to easily make out that the
money was fake. Also the texture and quality of the paper would easily reveal its originality
to those who are in regular interaction with it. Therefore comparing an 18 year rustic rural
boy with adults who deal with so many currency notes would not be fair. Discovering some
papers, coloured refill and scissors are not sufficient to say that he manufactured those
currency-notes, as they could easily be found in the general houses. Knowledge can’t be
presumed but must be proved beyond reasonable doubt. Therefore, principle of
preponderance of probability will not apply and subjective inquiry is necessary rather than
objectively proving presumption of knowledge.

This comment will argue that both s. 489B and 489C of IPC have words clearly denoting
mens rea i.e., ‘knowledge’ and ‘having reasons to believe’ and the same must be proved to
held the accused guilty. Knowledge means acquaintance with fact or truth; certain
perception of truth; belief which amounts to, or results in, moral certainty, indubitable

2 AIR 1987 SC 33
3 K. Hashim v. State of Tamil Nadu (2005) 1 SCC 237
apprehension; information; intelligence.4 However there is no straight jacket formula to infer
knowledge as a sine qua non for liability and the same would depend upon facts and
circumstances of the case. According to s.26,IPC, “A person is said to have “reasons to
believe” a thing, if he has sufficient cause to believe that thing but not otherwise.” ‘Reason
to believe’ has been used in defining the offences to make the requisite mens rea more
objective or less subjective. The ‘knowledge’ and ‘reasons to believe’ have been used in
juxtaposition to indicate the requisite mental element of the offences and proof of either of
the two would be sufficient to bring home the charges against the accused. A person is
supposed to ‘know’ where there is a direct appeal to his senses and a person is presumed to
have a ‘reason to believe’ if he has sufficient cause to believe the same. Herein the case
Umashanker was neither acquainted with the fact or truth about the counterfeit-note nor he
has sufficient causes to believe the same. A mere suspicion would not amount to sufficient
causes to believe that the notes were counterfeit.5 Therefore, mere selling, buying, receiving
or trafficking or using as genuine counterfeit currency without the requisite mens rea would
not be an offence under s. 489B of IPC , and also mere possession or even intending to use
forged currency will not render any liability under s. 489C in the absence of mens rea.

This comment will argue that the holding in this case is a “bad law”. Mere possession of
counterfeit-note shall not render any liability unless mens rea is proved, holds true as
discussed earlier but as the court points out the object of this legislation is to provide
protection to the economy as the counterfeiting poses a question before the Sovereignty of
the state and also the equal protection to currency-notes and bank-notes. Interpretation of s.
28 and s.489A have been on broader terms drawing an adverse presumption against the
maker of the counterfeit article6. If we compare counterfeit currency-notes to other
contraband material such as opium and when we compare s.9 of The Opium Act with s.
489B and 489C we find that no express mention of mens rea is there and in s.9 it is
‘presumed’ that one if found in possession of the contraband will have the requisite
knowledge and if the contrary knowledge exists it must be proved by the ‘accused’ himself7.
Herein these sections(489B &489C) there is an express mention of mens rea which are to be

4 City of South Euclid v. Clapces, 213 NE 2d 828 at p.832

5 Palvinder kaur v. State of Punjab AIR 1952 SC 354
6 as seen in earlier discussion in State of Kerala v. Mathai Verghese AIR 1987 SC 33
7 Inder Sain Vs. State of Punjab AIR 1973 SC 2309.
proved by the prosecution in order to held the accused guilty. The circumstances of both the
cases are almost similar as there is some contraband material in both the cases and there is
an express mention of mens rea in one while in other the presumption of mens rea is drawn.
Even when there is no express mention of mens rea in s.9 of The Opium Act, the court than
also drawn the presumption that accused had the requisite mens rea and he must prove the
same unless a contrary intention appears, therefore same presumptions must also be drawn
when there is an express mention of mens rea as in s.489B and 489C. Here also the guilty
must be presumed that he had the knowledge and must prove that he did not have that
requisite mens rea to accomplish this offence. Further in Ranjit D. Udeshi v. State of
Maharastra8, accused was charged under s.292, IPC. The Supreme court observed that: “The
first sub-section of 292(unlike some others which open with the words “whoever knowingly
or negligently etc.”) does not make knowledge of obscenity an ingredient of the offence.
The prosecution need not prove something which the law does not burden it with. If
knowledge were made a part of the guilty act (Actus reus), and required the prosecution to
prove it, it would place almost impenetrable defence in the hands of the offenders. It was
also argued that the number of books these is so large and their contents so varied that the
question whether there is mens rea or not must be based on definite knowledge of the
existence of obsenity. Therefore the same reasoning can also be attributed to this case as it is
difficult to obtain legal evidence of the offender’s knowledge about the obscenity of the
book etc., and so legal evidence to ascertain the offender’s knowledge about the counterfeit
money is also very difficult. In a series of decisions based on the similar issues the High
Court have acquitted the accused because the prosecution was not able to prove beyond a
reasonable doubt that the accused had that element of guilty mind. Each of such cases were
based on the authority of this judgement as being the only supreme authority in such issues
whereby they were bound to follow it.

Conclusion-
With the opening phrase it was said that men make counterfeit money and in many more
cases, money make counterfeit men. Its the mens rea alone which defines the liability in
most clear terms. If one posses the requisite knowledge or that he has all those sufficient
reasons to believe about the currency being counterfeit only then he must be held guilty. The

8 AIR1965 SC 881
object of the legislation by these provisions is to provide the protection to economy and
currency of the state. However these provisions are not meant to punish unwary possessors
or users. The witness were in regular trade and thus had more interaction with currency-note
therefore they were able to easily judge the originality of the note whereas drawing the same
inference for an 18 year old rustic rural boy would be absurd in itself. However, as the
technological advancement as taken a giant leap and with the increase in needs of
individuals the flow of money has also been increased which produced more counterfeit-
notes as its side effect. Money being a highly allured item, people on daily basis comes in
contact with it for every even and odd work. Therefore a strict interpretation must be made
by the courts, not only to provide justice but also to curb the menace of counterfeit currency-
notes or bank-notes.