CASE BRIEF: HASHIM v. STATE OF T.N., (2005) 1 SCC 237

 

CASE NAME	K. Hashim v. State of T.N., (2005) 1 SCC 237
CITATION	AIR 2005 SC 128, 2005 (1) SCC 237, (2005) 2 BLJ 440, 2004 (190) SUPREME 579, 2004 (9) SCALE 422, 2005 (1) SRJ 290, (2004) 4 KHCACJ 532 (SC)
COURT	Supreme Court of India
BENCH	Hon’ble Justice  Arijit Pasayat and Justice C.K. Thakker
PETITIONER	K. Hashim
RESPONDENT	State of Tamil Nadu
DECIDED ON	Decided on 17th November, 2004

INTRODUCTION

Regarding counterfeiting offenses under the Indian Penal Code (IPC), the case K. Hashim vs. State of Tamil Nadu, determined on November 17, 2004, is a seminal decision. The defendants were charged with offenses including the production, possession, and distribution of counterfeit money, specifically U.S. dollar notes. Sections 489A, 489B, and 489C of the IPC, which address counterfeiting and the use or possession of counterfeit money with knowledge of its falsity, were the basis for the charges. The case started when police officers conducted several raids and found counterfeit money in the accused's hands. In accordance with Section 120B IPC, the prosecution said that the defendants were involved in a criminal conspiracy to produce and distribute counterfeit currency, which poses a risk to the domestic and global financial systems. Important legal issues about the need for intent and knowledge to prove counterfeiting offenses were brought to light by this case. It also covered the standards of proof required to convict conspiracy participants, especially in cases where there was not always concrete proof of the fabrication of counterfeit goods. The verdicts were ultimately upheld by the Supreme Court, which emphasized the gravity of counterfeiting charges and their wide-ranging legal ramifications.

FACTS OF THE CASE

The conspiracy to counterfeit $20 denomination U.S. dollar notes is at the center of the facts. The case's defendants were involved in the production, possession, and attempted distribution of counterfeit US dollars in India. The Investigating Officer (PW-19) started the case with a raid after receiving a tip regarding counterfeiting. The home of Rajan Chettiar, which is situated at Palaiamman Koil Street in Villivakkam, Chennai, was raided on August 3, 1982. Eight bundles of counterfeit U.S. $20 bills (designated as MOs 4 to 11) were found by the police during the search in Thiruvengadam (PW-3). After a complaint was filed, more research was done.  Rajan Chettiar said PW-19 went to the Golden Cafi Lodge on Poonamallee High Road in Chennai. There, within the presence of P.S. Kumar (PW-4), the manager of the Lodge, a search of Room No. 72 resulted in the arrest of A-1 and A-4 and the recovery of three additional bundles of counterfeit $20 notes (MO 14). Five more bundles of counterfeit notes (MO 1 series) were found at Canara Timber Corporation, owned by Ravindran (PW-1), as a result of further inquiry based on A-1's confessional statement. Six bundles of counterfeit bills were found in A-2 during a subsequent raid at Iyyappa Lodge. During the subsequent late-night raid on A-3's property, Vasantham Press, A-3 was taken into custody. Printing inks and blocks used for counterfeiting were found during additional inspections conducted at several locations, including RJVA Press. On August 3, 1982, Rajan Chettiar, A-1, A-4, A-2, and A-3 were all taken into custody. On August 4, 1982, they appeared before the magistrate for judicial custody. The inquiry also revealed the participation of printers and artists who had contributed to the creation of counterfeit money. Two additional defendants, Ravindran (PW-1) and Rajendra Menon (PW-2), turned approvers and gave confessional statements crucial in bolstering the prosecution's case after Rajan Chettiar passed away during the trial. Based on the evidence collected, Sections 120B (criminal conspiracy), 489A (counterfeiting currency), 489C (possession of counterfeit cash), and 489D (manufacturing or having instruments for counterfeiting) of the Indian Penal Code were used to charge the remaining defendants (A-2 and A-3). The trial court found the accused guilty and was given a sentence of rigorous imprisonment (RI) and penalties. Only A-2 and A-3 still participated in the Supreme Court appeals, even though all four accused initially challenged their convictions. They each received a sentence of seven years in prison and a fine of Rs. 5,000, with a further two years in prison if they didn't pay. They were ordered to serve their sentences consecutively under Sections 489A and 489C. The Supreme Court heard the case after the High Court upheld their convictions. The main legal questions were whether Sections 489A and 489C applied to counterfeit foreign currency and how to interpret them.

ISSUES RAISED

• Whether the amount of counterfeit money found throughout the inquiry was enough to prove the accused's guilt beyond a reasonable doubt?
• Whether the accused's activities were part of a wider coordinated attempt to commit these charges and whether the evidence proved the existence of such a conspiracy.
• Was the accused responsible for currency counterfeiting?

ARGUMENTS FROM BOTH SIDES

Arguments on behalf of the petitioner 

• The learned counsel for the appellants questioned the correctness of the judgment of the High Court on several grounds. The main issue was the reliance on the evidence of PW-19, the investigating officer, and PWs 1 and 2, the approvers. It was argued that confirmation of important details was required in order to act on the approvers' testimony. Furthermore, it was argued that there was neither a legal nor a factual recovery. 
• The argument put forth was that proof of the conspiracy was necessary in order to apply Section 120B. No impartial witness is present. Everything stated by PWs 1 and 2 relates to the time frame before the alleged offense was committed, while PW-19's evidence pertains to the later time frame. PWs 1 and 2 had a good chance of receiving tutoring. There is no explanation for why Anjana Devi, whose company's premises are said to have been the source of several recoveries, was not investigated or even charged. Furthermore, it is not explained why PW-8 was not named as an accused party. Additionally, there is very little indication of healing.
• Because the expert was not questioned to demonstrate that he has the necessary knowledge to comment on the items' counterfeiting, relying on his testimony (PW-16) is therefore unsupported by the law. Since just one person was questioned to support the reports, and he wasn't the report's author, the prosecution really didn't benefit from his testimony. 
• The impact of Section 28 IPC's Explanation 2 has not been properly taken into account. Even if it is acknowledged that expert testimony must be considered, the expert witness's knowledge has been made explicit, and the prosecution has not proven the witnesses' and the report's contents' expertise in the current case. 

Arguments on behalf of the respondent

• According to the State's learned counsel, Explanation 2 of Section 28 is highly pertinent. Section 489A applies when it is demonstrated that the possession of an item that is likely to be used in any step of the counterfeiting process has occurred. 
• Some of the seized items were transferred to a foreign expert since it was impossible for an impartial expert to determine whether the foreign currency was counterfeit, and it would have been practically very expensive for the expert to come and testify. The trial court accepted the report as evidence while keeping in mind the impact of Section 293 of the Code. 
• Since conspiracy was the accusation against the accused, PW-1's testimony is highly pertinent in light of the provisions of Section 10 of the Indian Evidence Act, 1872, sometimes known as the "Evidence Act."

JUDGMENT

Counterfeiting occurs when one item is made to look like another, when that similarity is used to commit deceit, or even when there is no intention. Still, it is recognized that the likeness is strong enough to encourage deception. In Section 28, "counterfeit" does not mean a perfect replica of the counterfeited original. Explanation 2 in Section 28 is very important. It establishes a rebuttable presumption in cases where the likeness could trick a person. Until the opposite is demonstrated, the purpose or knowledge is assumed in such a situation. The Court observed that the appellants had been rightfully convicted under Section 120B read with Sections 489A, 489C, and 489D, IPC, as well as separately under Section 489C of the Code, given the credible, convincing, and trustworthy evidence that has been presented. Considering the purpose for which these provisions were passed, the sentences do not call for intervention.

CONCLUSION

The Supreme Court examined several significant criminal law issues, most notably those pertaining to currency counterfeiting and related offenses under Sections 489A, 489B, and 489C of the Indian Penal Code (IPC). These sections address the following topics: utilizing counterfeit currency, possessing counterfeit currency with the knowledge that it is counterfeit, and counterfeiting currency or banknotes. The Court looked extensively at how knowledge and purpose play a part in counterfeiting crimes. The prosecution maintained that the accused intentionally engaged in illegal actions relating to the circulation of counterfeit currency, notwithstanding the defense's contention that the mere possession of counterfeit currency does not necessarily indicate intent to use or disseminate it. Proving that the defendants were involved in a bigger conspiracy to create and distribute counterfeit notes and possessing counterfeit currency was a major burden of proof. The prosecution provided circumstantial evidence, such as the accused's counterfeit currency being seized. Furthermore, the narrative that the accused had intentionally participated in the plot was largely constructed from the confessions and testimonies of co-conspirators. The Court took pains to differentiate between simple possession and possession to use the counterfeit money unlawfully, though. The accused's convictions were affirmed by the Supreme Court, highlighting the significance of the law's strict enforcement of its prohibitions against counterfeiting and similar offenses. The Court concluded that, when read collectively, Sections 489A, 489B, and 489C of the IPC provide a framework that makes it illegal to produce and use counterfeit money and possess it when one knows it is fake. The Court's ruling made clear that participation in a criminal conspiracy might be proven by circumstantial evidence. Still, it also emphasized the importance of intent and knowledge in proving such violations. The ruling upheld the notion that coordinated attempts to falsify banknotes constitute economic offenses and activities that jeopardize financial integrity and national security.  The Supreme Court made it abundantly evident that participation in any phase of the counterfeiting process, from manufacturing to possession and distribution, would result in harsh legal repercussions by upholding the lower courts' rulings.