Calcutta High Court Clarifies Presumptions and Burden of Proof in Fake Indian Currency Note (FICN) Cases

Larger Bench Rules on Interpretation of Section 489B IPC, Emphasizes Mens Rea, Quantity Irrelevance, and Equal Application to Civilians and Government Personnel

In a landmark judgment dated November 10, 2025, the Calcutta High Court (Full Bench) delivered a detailed ruling addressing several pivotal questions related to offences involving Fake Indian Currency Notes (FICN) under Sections 489B and 489C of the Indian Penal Code (IPC). This judgment came as a result of multiple appeals and references consolidated to clarify the legal nuances concerning the presumption of guilt, burden of proof, and interpretation of "otherwise traffics in" under Section 489B IPC.

The Court examined four critical terms of reference:  

• 1. Whether statutory presumption applies when FICN is seized from an individual’s possession.  
• 2. If quantity or volume of FICN triggers such presumption, and if yes, what is the threshold.  
• 3. Whether recovery of substantial FICN from government personnel automatically attracts Section 489B IPC.  
• 4. Applicability of Section 489B IPC for high-quality counterfeit notes as defined under the Unlawful Activities (Prevention) Act, 1967 (UAPA).

The Larger Bench, comprising Justices Debangsu Basak and Jay Sengupta, meticulously analyzed numerous precedents, including decisions from the Supreme Court and various High Courts, to resolve these issues.

Key Highlights of the Judgment:

• 1. Presumption of Guilt and Mens Rea :- The Court underscored that mere possession of counterfeit currency does not automatically attract conviction under Section 489B IPC. The prosecution must prove mens rea - that the accused knew or had reason to believe the notes were counterfeit and had the intention to sell, buy, receive, or traffic them. The Court drew a clear distinction between statutory presumption and adverse presumption under Section 106 of the Indian Evidence Act, emphasizing that reverse onus arises only after the prosecution establishes foundational facts.

• 2. Quantity or Volume of FICN and Its Legal Relevance :- Contrary to some earlier interpretations, the Court held that quantity or volume of counterfeit notes is immaterial in itself for attracting statutory presumption under Section 489B IPC. However, possession of a substantial amount may indicate active transportation rather than dormant possession, which can shift the evidentiary burden to the accused to explain such possession during examination under Section 313 CrPC. The Court stressed that this principle applies equally to civilians and government personnel.

• 3. Government Personnel and Automatic Presumption :- The Court rejected any notion that recovery of FICN from police, CISF, defense personnel, or other government officials automatically invokes Section 489B IPC. The law does not create special presumptions for any class of persons, and constitutional safeguards, including Article 21, prohibit such arbitrary presumptions.

• 4. High-Quality Counterfeit Notes under UAPA :- The Court clarified that the provisions related to high-quality counterfeit currency under UAPA are distinct and require different parameters such as minimum quantity thresholds. Nonetheless, for the purpose of Section 489B IPC, the quality or denomination of counterfeit currency seized does not affect the applicability of the offence.

• 5. Necessity of Specific Charges and Procedural Fairness  :-The Court emphasized that trial courts must frame specific charges in clear language to enable accused persons to understand and respond effectively, particularly concerning the "otherwise traffics in" phrase. Absence of such clarity prejudices the accused and vitiates the trial process.

• 6. Burden of Proof and Explanation by the Accused:-  While the prosecution shoulders the initial burden of proof, failure of the accused to offer explanation during Section 313 CrPC examination-especially when facts are within their special knowledge-may lead to an adverse inference under Section 106 of the Evidence Act. However, such a burden arises only after the prosecution satisfactorily proves the foundational facts beyond reasonable doubt.

• 7. Interpretation of “Otherwise Traffics In” :- The Court interpreted "otherwise traffics in" broadly to include active transportation or dealing in counterfeit notes beyond the acts of selling, buying, or receiving. This phrase is not to be read ejusdem generis with the other terms but as encompassing other forms of trafficking that facilitate circulation of counterfeit currency.

The judgment extensively reviewed earlier rulings such as Jubeda Chitrakar v. State of West Bengal, Hoda Sk. v. State of West Bengal, Umashanker v. State of Chhattisgarh, and M. Mammutti v. State of Karnataka, among others, reconciling their findings into a coherent legal framework applicable to FICN offences.

Implications of the Judgment:  

This authoritative ruling brings clarity to the prosecution and defense strategies in counterfeit currency cases. It safeguards accused persons from arbitrary reverse onus without adequate proof, insists on proper charge framing, and reinforces the necessity of proving mens rea. It also prevents misuse of statutory provisions against government servants by applying the law uniformly.

The Court directed that the consolidated appeals and revisional applications be decided in light of these conclusions by appropriate benches, ensuring consistent and fair adjudication across cases.

Bottom Line:

Mere possession of counterfeit currency notes is not sufficient to convict under Section 489B IPC; prosecution must prove mens rea-knowledge or reason to believe the notes are counterfeit-and an overt act of selling, buying, receiving, or otherwise trafficking. Large quantity or active transportation of counterfeit notes raises presumption of trafficking, shifting burden on accused to explain possession.

Statutory provision(s): Indian Penal Code Sections 489B, 489C; Indian Evidence Act Section 106; Code of Criminal Procedure Section 313; Unlawful Activities (Prevention) Act, 1967 provisions on counterfeit currency

Anikul @ Anikul Islam v. State of West Bengal, (Calcutta)(FB) : Law Finder Doc Id # 2806532