State of Kerala v. Mathal Vergese and Oths

3/16/2016
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StateOfKeralavMathalVergheseAndOrs.
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SupremeCourtofIndia
19November1986
State Of Kerala
v
Mathal Verghese And Ors.
CaseNo:CriminalAppealNo.26of1978
Bench:M.P.Thakkar,S.Natarajan
Citation:1986IndlawSC226,(1986)4SCC746,(1987)SCC(Cr)3,AIR1987SC33,1987BBCJ
14,1986(88)BomLR698,[1987]62CompCas857,1987CRLJ308,1987CrLR(SC)122,JT1986
SC928,1986(2)SCALE851,[1987]1S.C.R.317,1987(1)UJ614
Summary:CriminalIndianPenalCode,1860,ss.34,120B,420,489A,489B,489C,511Indian
Paper Currency Act, 1822, s. 2 Counterfeit of currency Foreign currency In furtherance of
conspiracy,accused/respondentsallegedlyforgedandcounterfeiteddollarnotesTrialCourtacquitted
accusedOnrevision,HCconfirmedorderofdischargerenderedbyTrialCourtHence,instantappeal
Accusedcontendedthatchargeu/ss.489Aand489CofIPCcouldbelawfullyleveledonlyincaseof
counterfeitingof'Indian'currencynotesandnotincaseofcounterfeitingof'foreign'currencynotes.
Held,thereisneitheranycompulsionoflawnoroflogicforindulgingintheexerciseundertakenby
theHC.Norwasanyidealtobeattainbydoingso.Theexpression'currencynote'asitstoodwaswide
andpervasiveenoughtoembracethecurrencynotesissuedbyIndiaasalsocurrencynotesissuedby
any other country in the world. The HC also fell in error in being influenced by the definition of
currencynotesembodiedinthetheAct.TheHChasoverlookedtheobviousfactthatthedefinition
contained1ins.2oftheActisonlyforthepurposesofthatparticularActanditcannotbeimported
into s. 489A to 489E of IPC, as has been done by the HC. The view taken by the HC is thus
thoroughly unsustainable. The judgment and order of discharge rendered by the HC are therefore
reversed and set aside. The matter will not to go back to the trial court for proceeding further in
accordancewithlaw.Appealpartlyallowed.
Ratio To read expression 'any currency note' to mean and refer to 'Indian currency note' is to
misreadexpressionasitcoverscurrencynotesissuedbyanyandeverycountryofworld.
TheJudgmentwasdeliveredby:Thakkar,J.
1.Counterfeitersallovertheworldmustbesinginginecstasy:
"ifthereisheavenonearth,itishere,here,here',for,accordingtotheKeralaHighCourt1,Indian
lawdoesnotmakecounterfeitingofcurrencynotesofanycountryintheworld,otherthanthatof
India,anoffence."
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2. The High Court has persuaded itself by a process of judicial activism in reverse gear, that
makingofsuchcounterfeitnotesisnotanoffenceunderSection489AoftheIndianPenalCode
(I.P.C.) and that having in possession such counterfeit currency notes is not an offence under
Section 489C of the I.P.C. Such a view has been taken even though there is nothing in the
languageofthesesectionstowarrantSuchaninterpretationaswillbecomeevidentpresently.
1.JudgmentandOrderrenderedbytheKeralaHighCourtinCr.R.P.263of1975onNovember
17, 1976, giving rise to the present appeal by certificate of fitness u/art. 134(1)(c) of the
ConstitutionofIndia.
3.Facts:
The six respondents herein were charged with offences punishable under Sections 120B, 489A,
489BandS.420readwithSs.511and34IPC.Theprosecutioncaseagainstthemwasthatin
furtheranceofaconspiracyenteredintobyaccusednos.1to4toforgeandcounterfeitAmerican
dollar notes of 20 dollar denomination, they indulged in counterfeiting by printing 2000 such
notes. Respondents 1 and 2 were further alleged to have been in possession of 148 forged
currencynotesknowingthesametobeforged,withintenttousetheseforgednotesasgenuine.
4. The respondents were committed by the Magistrate to stand their trial before the Sessions
Court,foroffences,underSections120B,487Aand489CreadwithSs.511and34IPC.Itwas
contended by the respondentsaccused before the Sessions Court that a charge under Sections
489A and 489C of the IPC could be lawfully levelled only in the case of counterfeiting of'Indian'
currency notes and not in the case of counterfeiting of 'foreign' currency notes. The contention
wasupheldbytheSessionsCourtatthethresholdofthetrialandtheaccusedweredischarged.
AggrievedbytheorderoftheSessionsCourtdischargingtherespondents,thepetitioner(Stateof
Kerala)filedaRevisionPetitionbeforetheHighCourtofKerala.
5. The High Court by its order under appeal confirmed the order of discharge rendered by the
SessionsCourtholdingthat
"IntheabsenceofanexplanationsimilartothatinthecaseofbanknotesSection489Aandthe
Sections that follow which relate to counterfeiting of currency notes do not apply to cases of
counterfeitingofdollarbills."
Thepetitionerthereuponfiledanapplicationu/art.134(1)(c)oftheConstitutionofIndiaforleave
toappealtotheSupremeCourt.Byitsorderunderappeal,theHighCourtcertifieditasafitcase
forappealtotheSupremeCourtas
"The case involves considerably important questions of law as to whether counterfeit American
dollarnoteswillfallwithinthepurviewofSections489Aand489CoftheIndianPenalCode."
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ThatishowthematterhascomeupbeforethisCourt.
6.Relevantprovisions:
TheanatomyoftherelevantprovisionsrequirestobeXrayedattheoutset.
Theconcernedprovisionsmaythereforebescreened:
"489A.Whoevercounterfeits,orknowinglyperformsanypartoftheprocessofcounterfeiting,any
currencynoteoranknote,shallbepunishedwith(imprisonmentforlife),orwithimprisonmentof
eitherdescriptionforatermwhichmayextendtotenyears,andshallbeliabletofine.
7.Explanation:
Forthepurposesofthissectionandofsections489B,4(489C,489Dand489E)theexpression
"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
equivalentto,orasasubstituteformoney.
3.Subs.byAct26of1955,s.117andsch.for"transportationforlife"(w.e.f.111956).
4. Subs. by Act 35 of 1950, s. 3 and Sch.II for "489C and 489D". "489C. Whoever has in his
possession any forged or counterfeit currencynote or bank note, knowing or having reason to
believethesametobeforgedorcounterfeitandintendingtousethesameasgenuineorthatit
may be used as genuine, shall be punished with imprisonment of either description for a term
whichmayextendtosevenyears,orwithfine,orwithboth."
8.Analysis:AnanalysisofSection489Arevealsthat:
(i)counterfeiting'any'currencynoteorbanknoteisanoffence
(ii)knowinglyperforminganypartoftheprocessofcounterfeitinganycurrencynoteorbanknote
isalsoanoffenceand
(iii)theprohibitionagainstcounterfeitingorperformingsuchprocessappliestocurrencynotesas
alsotobanknotesasdefinedbytheexplanationtoSection489A.Andinasmuchastheaforesaid
expressioninteraliameansanyengagement1forthepaymentofmoneytothebearerissuedby
or under the authority of any State or Sovereign power provided it is intended to be used as
equivalent to or substitute for money the prohibition also extends to counterfeiting etc. of
currencynotesofanyothersovereignpower.
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9.Outcome:Thisanalysisrevealsthatthelegislativeembargoagainstcounterfeitingenvelopsand
takeswithinitssweep'currencynotes'ofallcountries.Theembargoisnotrestrictedto'Indian'
currencynotes.Thelegislaturecouldhave,buthasnot,employedtheexpression'Indiancurrency
1. A promise, obligation or other condition that binds. (See Collins Dictionary) note'. If the
legislative intent was to restrict the parameters of prohibition to 'Indian currency' only, the
legislaturecouldhavesaidsounhesitatingly.The'expression'currencynote'islargeenoughinits
amplitude to cover the currency notes of 'any' country. When the legislature does not speak of
currencynotesofIndiatheCourtinterpretingtherelevantprovisionoflawcannotsubstitutethe
expression'Indiancurrencynote'inplaceoftheexpression'currencynote'ashasbeendoneby
the High Court. The High Court cannot do so for, the Court can merely interpret the section it
cannot rewrite, recast or redesign the section. In interpreting the provision the exercise
undertaken by the Court is to make explicit the intention of the legislature which enacted the
legislation.
In is not for the Court to reframe the legislation for the very good reason that the powers to
'legislate' have not been conferred on the Court. When the expression 'currency note' is
interpretedtomean'Indiancurrencynote',thewidthoftheexpressionisbeingnarroweddownor
cut down. Apart from the fact that the Court does not possess any such power, what is the
purpose to be achieved by doing so? A Court can make a purposeful interpretation so as to
'effectuate'the intention of the legislature and not a purposeless one in order to 'defeat 'the
intention of the legislators wholly or in part. When the Court (apparently in the course of an
exercise in interpretation) shrinks the content of the expression 'currency note to make it
referable to only 'Indian currency note', it is defeating the intention of the legislature partly
inasmuchastheCourtmakesitlawfultocounterfeitnotesotherthanIndiancurrencynotes.
10. The manifest purpose of the provision is that the citizens should be protected from being
deceivedorcheated.Thecitizensdealwithandtransactbusinesswitheachotherthroughthe
medium of currency1, (which expression includes coins as also paper currency that is to say
currencynotes).Itisinconceivablewhythelegislatureshouldbeanxioustoprotectcitizensfrom
beingdeceivedorcheatedonlyinrespectofIndiancurrencynotesandnotinrespectofcurrency
notesissuedbyothersovereignpowers.
11.Thepurposeofthelegislationappearstobetoensurethatapersonacceptingacurrencynote
is given a genuine currency which can be exchanged for goods or services and not a worthless
pieceofpaperwhichwillbringhimnothinginreturn,itbeingacounterfeitoraforgedcurrency
note. Would the legislature in its wisdom and anxiety to protect the unwary citizens extend
immunity from being cheated in relation to Indian currency notes but show total unconcern in
regardtotheirbeingcheatedinrespectofcurrencynotesissuedbyanyforeignStateorsovereign
power?.
12.InthemodernageatouristfromaforeigncountrymaybringfromhisowncountryintoIndia
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currencytotheextentpermissibleunderthelawinIndia.Soalsohemayobtainforeigncurrency
inexchangeofIndiancurrencywhilstinIndiaprovidedhedoessototheextentpermissiblebythe
ForeignExchangeRegulationAct,1.Currencyn.1.ametalorpapermediumofexchangethatis
in current use. (Collins English Dictionary). 1973(1) and operates through an authorized
person(2)knownasmoneychanger(3).Woulditbereasonabletoassumethatthelegislaturewas
totallyobliviousoftheneedtoprotectthemfrombeingdeceivedanddefrauded?
It would be unwise to do so in the face ,of the internal evidence which provides a clue to the
legislativeanxietyonthisscore.InfacttheframersoftheCodeweresoanxioustoprotectthe
general public from fraudulant acts of counterfeiters that not only have they defined the word
"counterfeit"inverywidetermsintheIndianPenalCode,buttheyhavealsoprescribedaruleof
evidence in Explanation 2 so as to draw an adverse presumption against the maker of the
counterfeit article, as is evident from the definition of the term "Counterfeit" read with the
ExplanationsinS.28oftheIndianPenalCode(1).
13.Whatismore,theexpression'banknote'employedinsections489Ato489EofI.P.C.takes
withinitssweepanengagementforthepaymentofmoneyissuedbyorundertheauthorityof
any State or Sovereign power as is evident from the analysis of the Section made hereinabove.
AnditwouldthereforecoveraDollarBillorDollarNoteaswell.AdollarbillissuedbytheSovereign
GovernmentofUnitedStatesofAmericawouldbecoveredbytheexpression'banknote'.Andas
revealedbytheanalysismadeearlier,theprohibitionwouldapplytothecounterfeitingofaBank
noteorbeinginpossessionofacounterfeitBanknoteaswell.Itwould,therefore,inanycase,be
anoffencetocounterfeitadollarbillortobeinpossessionofcounterfeitdollarbill.
1. S. 13(1): The. Central Government may, by notification in the official Gazette, order that
subjecttosuchexemption,ifany,asmaybespecifiedinthenotification,nopersonshallexcept
with the general or special permission of the Reserve Bank and on payment of the fee, if any,
prescribed, bring or send into India any gold or silver or any foreign exchange or any Indian
currency.Explanation:Forthepurposesofthissubsection,thebringingorsendingintoanyport
orplaceinIndiaofanysucharticleasaforesaidintendedtobetakenoutofIndiawithoutbeing
removedfromtheshiporconveyanceinwhichitisbeingcarriedshallnonethelessbedeemedto
beabringing,or,asthecaseanygoldorsilveroranyforeignexchangeoranyIndiancurrency.
(2)No person shall, except with the general or special permission of the Reserve Bank or the
writtenpermissionofapersonauthorizedinthisbehalfbytheReserveBank,takeorsendoutof
India any gold, jewellery or precious stones or Indian currency or foreign exchange other than
foreignexchangeobtainedbyhimfromanauthorizeddealerorfromamoneychanger.
2. Sec. 6(1). The Reserve Bank may, on an application made to it in this behalf, anthorise any
persontodealinforeignexchange.
(2)AnauthorizationunderthisSectionshallbeinwritingand
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(i)Mayauthorizedealingsinallforeigncurrenciesormayberestrictedtoauthorisingdealingsin
specifiedforeigncurrenciesonly
(ii) May authorize transactions of all descriptions in foreign currencies or may be restricted to
authorizingspecifiedtransactionsonly
(iii)Maybegrantedtobeeffectiveforaspecifiedperiod,orwithinspecifiedamounts
(iv)Maybegrantedsubjecttosuchconditionsasmaybespecifiedtherein.
(3)Anyauthorizationgrantedundersubs.(1)mayberevokedbytheReserveBankatanytimeif
theReserveBankissatisfiedthat
(footnotecontd.)
(i)Itisinthepublicinteresttodosoor
(ii)Theauthorizeddealerhasnotcompliedwiththeconditionssubjecttowhichtheauthorisation
was granted or has contravened any of the provisions of this Act or of any rule, notification,
directionorordermadethereunder:.
Providedthatnosuchauthorisationshallberevokedonthegroundspecifiedincl.(ii)unlessthe
authorised dealer has been given a reasonable opportunity for making a representation in the
matter.
(4) An authorised dealer shall, in all his dealings in foreign exchange and in the exercise and
dischargeofthepowersandofthefunctionsdelegatedtohimundersection74,complywithsuch
generalorspecialdirectionsorinstructionsastheReserveBankmay,fromtimetotime,thinkfit
togive,andexceptwiththepreviouspermissionoftheReserveBank,anauthoriseddealershall
notengageinanytransactioninvolvinganyforeignexchangewhichisnotinconformitywiththe
termsofhisauthorisationunderthissection.
(5)Anauthoriseddealershall,beforeundertakinganytransactioninforeignexchangeonbehalfof
any person, require that person to make such declarations and to give such information as will
reasonablysatisfyhimthatthetransactionwillnotinvolve,andisnotdesignedforthepurposeof,
anycontraventionorevasionoftheprovisionsofthisActorofanyrule,notification,directionor
ordermadethereunder,andwherethesaidpersonrefusestocomplywithanysuchrequirement
or makes only unsatisfactory compliance there with, the authorized dealer shall refuse to
undertake the transaction and shall, if he has reason to believe that any such contravention or
evasionasaforesaidiscontemplatedbytheperson,reportthemattertotheReserveBank.
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3.Sec.7:(1)TheReserveBankmay,onanapplicationmadetoitinthisbehalf,authorizeany
persontodealinforeigncurrency.
(2)Anauthorizationunderthissectionshallbeinwritingand
(i)Mayauthorizedealingsinallforeigncurrenciesormayberestrictedtoauthorizingdealingsin
specifiedcurrenciesonly
(ii) May authorize transactions of all descriptions in foreign currencies or may be restricted to
authorizingspecifiedtransactionsonly
(iii)Maybegrantedwithrespecttoaparticularplacewherealonethemoneychangershallcarry
onhisbusiness
(iv)Maybegrantedtobeeffectiveforaspecifiedperiod,orwithinspecifiedamounts
(v)Maybegrantedsubjecttosuchconditionsasmaybespecifiedtherein.
(3)Anyauthorizationgrantedundersubs.(1)mayberevokedbytheReserveBankatanytimeif
theReserveBankissatisfiedthat:
(i)Itisinthepublicinteresttodosoor
(ii)Themoneychangerhasnotcompliedwiththeconditionssubjecttowhichtheauthorization
was granted or has contravened any of the provisions of this Act or of any rule, notification,
directionorordermadethereunder.Providedthatnosuchauthorisationshallberevokedonthe
groundspecifiedincl.(ii)unlessthemoneychangerhasbeengivenareasonableopportunityfor
makingarepresentationinthematter.
(4) The provisions of subss. (4) and (5)'of S. 6 shall, in so far as they are applicable, apply in
relationtoamoneychangerastheyapplyinrelationtoanauthoriseddealer,
(5)Explanation
Inthissection,"foreignmoney"meansforeigncurrencyintheformofnotes,coinsortravellers'
cheques and "dealing" means purchasing foreign currency in the. form of notes, coins or
traveller'schequesorsellingforeigncurrencyintheformofnotesorcoins.
14. Why then construe the expression 'currency note' as being applicable only to an Indian
currencynoteandnottoaforeigncurrencynotelikeadollarbill?Thereisneitheranycompulsion
oflawnoroflogicforindulgingintheexerciseundertakenbytheHighCourtwhichintheopening
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partofthejudgmenthasbeenadvertedtoas'judicialactivisminreversegear'.Norwasanyideal
tobeattainbydoingso.Whythenstretchtheunstretchable?ItappearsthattheHighCourtlost
itswaywhilstgropinginthedarkbyapossiblymisconceivedandillfoundedargument1builton
the circumstance that whilst the explanation to Section 489A in terms refers to a bank note
issued 'under the authority of any State or sovereign power' similar explanation is not added in
thecontextoftheexpression'currencynote'.TheHighCourtoverlookedthefactthattherewas
neither any occasion, nor any reason, nor any need, for doing so. For, the expression 'currency
note'asitstoodwaswideandpervasiveenoughtoembracethecurrencynotesissuedbyIndiaas
alsocurrencynotesissuedbyanyothercountryintheworld.
15.Therewasthereforenoneedtoaddasimilarexplanation.Itwouldhavebeenfutiletoamplify
that the expression 'currency note' which on a plain reading covers 'all' currency notes meant
what it said. To read the expression 'any currency note' to mean and refer to 'Indian currency
note'istomisreadtheexpressionbydoingviolencebothtotheletterandspiritthereofunmindful
of the fact that the former expression in its plentitude covers the currency notes issued by any
andeverycountryoftheworldwhereastheletterisapplicabletoonlyoneofthecountriesinthe
world.
16. The High Court also fell in error in being influenced by the definition of currency notes
embodiedintheIndianPaperCurrencyAct(ActXXof1822).TheHighCourthasoverlookedthe
obviousfactthatthedefinitioncontained1inS.2ofthesaidActisonlyforthepurposesofthat
particularActanditcannotbeimportedintoSection489Ato489EoftheIndianPenalCode,as
hasbeendonebytheHighCourt.
17.TheHighCourtwasthuswhollywronginexertingitselfunnecessarilyandbendingbackwards
inordertoholdthatSections489Ato489Earenot
1. "28. A person is said to "counterfeit" who causes one think to resemble another thing,
intending by means of that resemblance to practise deception, or knowing it to be likely that
deceptionwilltherebybepractised.
18.Explanation1
Itisnotessentialtocounterfeitingthattheimitationshouldbeexact.
19.Explanation2
Whenapersoncausesonethingtoresembleanotherthing,andtheresemblanceissuchthata
person might be deceived thereby, it shall be presumed, until the contrary is proved, that the
person so causing the one thing to resemble the other thing intended by means of that
resemblance to practise deception or knew it to be likely that deception would thereby be
practised."
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1.SaystheHighCourt:
"The omission of an explanation in Sec. 489A for the expression "currency note" similar to the
one for 'hank note' thus assumes importance. The expression could refer only to the currency
notes issued by the Government of India . " applicable to currency notes other than Indian
currency notes. And in holding that counterfeiting of or possessing of counterfeit dollar bills or
dollar notes is not an offence under the Indian law, thereby issuing a carte blanche to the
counterfeitersoftheworldtoestablishtheirheadquarterswithintheStateofKeralawithaview
tocarryontheiractivitieswithimpunityundertheumbrellaunwittinglyopenedforthembythe
judgmentoftheHighCourt.
20.TheviewtakenbytheHighCourtisthusthoroughlyunsustainable.Thejudgmentandorder
ofdischargerenderedbytheHighCourtarethereforereversedandsetaside.Thematterwillnot
to go back to the trail court for proceeding further in accordance with law in the light of the
observationsmadehereinabove.Appealisaccordinglyallowedtothisextent.
Appealallowed.
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