This article has been written by Saurab Verma of 2nd year pursuing B.A. LL.B from Dr. Ram Manohar Lohiya National Law University, Lucknow.

Introduction

Coins are basically the most used form of currency which are used in the daily transactions  and they are transferred from one person to another very frequently.But have you ever thought about what if these small denominations are counterfeit or fake and to what extent they can impact the whole market and what to do even if you spot the fake coins, what are the measures and precautions every person should take in his/her daily transactions.Unlike the coins, the cases of government stamps are less because now their use have become less but have you ever thought about what if the counterfeit of government stamp papers are used matters related to land or property.So in this article, I have covered the area about how the counterfeit coins are made, how they are circulated in the market, what are the consequences of liquidation of the counterfeit coins and stamps, what are the laws governing and regulating these types of activities.In this article, I have also discussed about the position of several laws and what are the flaws in the governing laws and how in several circumstances they have been interpreted.

Coins 

Indian Coin is defined as the metal stamped and issued by the Government of India in order to be used as money under Section 230 of Indian Penal Code,1860.Coins in India are issued by the Reserve Bank of India(RBI) which is entitled to receive  the supply of coins from Government of India.There are various mints like mints in Mumbai,Kolkata,Hyderabad which not only mint coins but also make coin blanks (round metal disks which are ready to be stuck down as a coin) which are incorporated  as units under Security Printing and Minting Corporation of India Limited(SPMCL).Unlike the currency notes, printed by the RBI, the coins in India are minted under The Coinage Act, 2011.

Counterfeiting of Coins 

Counterfeiting of coins is an offence as incorporated under Section 231 of Indian Penal Code,1860 in which a person commits the offence intending to practice deception or knowing it to be likely that deception will happen or even if he is a part of the process of counterfeiting coins will be entitled for the imprisonment which will depend upon the circumstances and facts of the case and it can extend upto imprisonment for seven years and will also be liable for fine.But the problem is that even if it is a punishable offence its impact is more harmful because these counterfeit coins and currencies will lead to inflation in the market because excess liquidity will be there in the market and  RBI can regulate only the accounted money and therefore will impact the economy of our country.Also, counterfeiting is done so secretly that it is hard to find the fake coins and these coins are tremendous in amount and minted so frequently by the mint companies that it is difficult to identify and check each and every coin.Another big problem is that the ownership of these coins in the market changes very quickly and therefore to find the counterfeiter is again a difficult task and the probability of punishing an innocent person is very high. If we see recently, the counterfeit agencies are currently active in Gujarat, Mumbai , Delhi, Saharanpur in Uttar Pradesh and Murshidabad in Bengal. Recently, in May 2019 , a racket printing the fake coins and currency was captured in Delhi- NCR region primarily in the industrial belt near Faridabad and also police captured some toll booths of the national highways where the printing of Rs.5  and Rs.10 denominations were done.

Making or Selling Counterfeiting Coin

How they are made?

The casting of fake or counterfeit coins is very easy at its lowest level. One of the cheapest and the easiest way is to simply pouring the liquid metal into a caste mold of the authentic coin. these metals are easily available in the market and the producers manage to pour the metal which is good enough to give the exact same colour of the original coin. There is another category of coins on which counterfeiting is frequently done known as Struck- Counterfeit coins.These coins are made for some  unrecognizable counterfeit coins.There process are the same as the process followed in making the original coins as followed by the mint companies.These coins are basically made by the Spark Erosion method in which electromagnetic sparks are used to erode the metal.However, this method is expensive but these types of counterfeit coins are made in the same way.

How are these Coins  liquidate in our market ? 

The liquidation of these fake coins is easy because it can start from the very lower level because they can be made individually and also the instruments that are needed in making these coins are sold by the mint companies  form which they get in return the great profits. 

However, making or selling the instruments for fake coins is an offence under Section 233 of IPC in which  the imprisonment upto three years can be given.Also, another way of liquidating these coins is by importing .In 2017, there was the biggest amount of Rs. 50 crores in the form of fake coins were imported in India by the famous gang of Upkar Luthra and Sweekar Luthra.

Possession of Instrument or Material for Counterfeiting Coin 

Section 235 of IPC states about the extent upto ten years of imprisonment whoever is in  possession of any instrument or material used for making the counterfeit coins. But if we look practically, this provision is very difficult to implement because again the chances of punishing the innocent are high and any person can be struck in this process.It was therefore held in the case of Shahid Sultan Khan vs State of Maharashtra where the police raided the Kaniz Apartment in Mumbra  found the denominations of Rs.5 notes and coins of Rs.1,Rs.2,Rs.5 and the instrument which were used for making those coins but not in theiractive state but the appellant was arrested for keeping possession of the instruments and materials used for counterfeiting and was convicted by the trial court but the High Court reversed the decision and said held that mere possession of the materials or instruments  for making the fake coins is not enough to be as evidence that counterfeiting is done under Section 232 and Section 235 of the IPC but it has to fulfill the requirement of Section 28 of IPC which says that intention to deception is necessary or  mens rea plays the important role and the appellant was held not  liable.

Delivery of Counterfeit Coin 

The delivery of the fake coins are done along with mostly the delivery of antique or rare coins through auction.There are some auctioning companies like Todywalla Auctions etc. which are known to be the biggest antique coins selling company in India which are basically trusted but some other fake companies are also there which sell their coins through fake dealers and to attract the purchaser, they use online mode of delivery like there was the fake ebay dealer captured for selling the fake antique coin who showed the original coin online but shipped the fake coin.Also, it is easy to sell the counterfeit coins online because to check the authenticity of the company is less than the offline sale and also it is easy for the producers to escape from the liability because it is easy to remove the data online than in offline sales. Also, the delivery of the normal coins which we use in the market, most people do not pay attention to the coins unlike the  notes, therefore, it is easily transferable in the market from one person to another.However, the person whoever is having the counterfeit coin and delivers the same to another while knowing that it is a fake coin is liable for the imprisonment which can extend upto 5 years and he will also liable for the fine.

Criminal Acts of Mint Employees

The most frequent act which is done by the mint employees is the selling of the instruments and materials to the other companies for printing the fake coins and notes by which they earn great profits.This activity becomes more frequent when RBI instructs them to make more number of coins as needed as per the market because then it is difficult to check the bulk amount .However, it has been stated in Section 244 of IPC states about the punishment of imprisonment upto seven years to the mint employees if they omits to do what they are legally bound to do with the intention of causing the tempering with the coin but  are prevented under Section 245 which states that the employees are not liable if coining instruments are taken from them unlawfully.

Alteration of Coins 

Alteration of coins are basically done to produce a passable counterfeit  coins so that a common genuine coins so that it appears to be a rare genuine coin.It is done also for advertising as on ancient coins advertising logos and slogans are written.So, it is often illegal to alter the coins but laws are different in different countries and basically it depends upon the nature of alteration and intention of the person making the alteration.Coins in India are minted under The Coinage Act, 2011.According to the Act, no person shall use the metal whether stamped or unstamped intending to use for making the money.

No person can destroy the shape,design,change colour, cut the coin otherwise he will be liable for bearing the loss for cutting or destroying the coin and the loss will be calculated according to the face value of the coin. 

Government Stamps 

Counterfeiting the government stamps

Section 255 of IPC states about counterfeiting the government stamps and imposes the imprisonment of life or it can be extended upto seven years depending upon the facts and circumstances of the case.Unlike the coins, the cases of fake government stamps are less because now the use of the stamps are less as compared to earlier times.But,our focus should be on the stamp papers regarding the land , property etc. because recently in August 2019, there were 2 stamp vendors who were arrested for making fake land documents in Hyderabad.However, various sections are there in IPC which have restricted the sell or purchase of counterfeit government stamps like Section 258 which restricts the sell or purchase of fake stamps  to which the imprisonment upto seven years is given and also the provision related to the possession of instrument or material used for making the counterfeit stamps is incorporated under Section 259 of IPC.

Proposals for Reform 

Out of all the denominations of the counterfeit coins, 10 Rs coin is the most counterfeited especially in Delhi and they are mostly made in Haryana. When they  first came, it was very easy for the producers to produce the fake ten rupees coins because their structure and pattern were less complicated as compared to the coins of other denominations.Therefore, now the RBI has issued some guidelines about a ten rupee coin, it has made legally tender both the types of coins one with the ten rupee symbol printed and one without the symbol to prevent counterfeiting.Also, the commemorative coins (coins on which the images are printed) were also made legal and said that they can be easily used in the transactions.RBI also said to the banks to accept Rs.10 coins in transactions and exchange them at all their branches.Also, there should be strict governance towards the working and procedure followed in the mint  companies because they are basically the source of counterfeiting the coins and notes.It is also the responsibility of the consumer to check every single coin of even the smallest denomination which are used in the transactions . Also, more strict laws to be there, the punishment should not just include the imprisonment and fine but also the license of the vendors should also be cancelled depending upon the facts and circumstances of the case.

References

1. https://economictimes.indiatimes.com/news/politics-and-nation/how-a-gang-pumped-rs-50-crore-fake-coins-into-india/meet-the-luthra-brothers/slideshow/59487341.cms
2. https://timesofindia.indiatimes.com/city/hyderabad/stamp-vendors-found-making-fake-land-documents-2-held/articleshow/70527190.cms
3. https://www.ndtv.com/business/rs-10-coins-fake-or-not-as-rbi-clears-the-air-10-things-that-you-should-know-budget-1811761
4. https://blog.providentmetals.com/fake-coins-how-to-tell-a-counterfeit-from-an-original.htm#.Xj8-gzb
5. https://timesofindia.indiatimes.com/city/chandigarh/factory-minting-fake-coins-sealed-in-ncr/articleshow/69426112.cms
6. ttps://timesofindia.indiatimes.com/business/india-business/rbi-says-all-coins-are-legal-tender/articleshow/69981553.cms

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