Indian Criminal Law | IPC and BNS Guide
IPC Section 489C: Possession of Counterfeit Currency Notes and BNS Section 180
Possessing a forged or counterfeit currency note can amount to a criminal offence when accompanied by knowledge, or reason to believe that the note is counterfeit, and an intention that it be used as genuine. This guide explains the former Indian Penal Code provision and the current Bharatiya Nyaya Sanhita rule.
What did Section 489C of the Indian Penal Code provide?
The former Section 489C IPC punished a person who possessed a forged or counterfeit currency note or bank note, knowing or having reason to believe that it was forged or counterfeit, and intending to use it as genuine or that it may be used as genuine.
Original statutory wording:
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.
BNS Section 180: Current legal provision
Section 180 BNS addresses possession of forged or counterfeit coin, Government stamp, currency note or bank note where the person knows or has reason to believe it is forged or counterfeit and intends to use it as genuine or that it may be used as genuine. Compared with IPC Section 489C, the provision expressly covers coins and Government stamps as well.
For the current statutory text, refer to the official India Code database and search for the Bharatiya Nyaya Sanhita, 2023, Section 180. The Ministry of Home Affairs also publishes information on the new criminal laws.
Essential ingredients of the offence
- Possession: The accused must have possession of the relevant forged or counterfeit item. The facts must establish a meaningful connection with the item, rather than an unsupported assumption.
- Knowledge or reason to believe: The accused knew, or had sufficient reason to believe, that the note or other covered item was counterfeit.
- Intention to use as genuine: The accused intended to pass the item as genuine or intended that another person might use it as genuine.
All statutory elements must be considered on the evidence. Possession alone does not automatically prove the requisite knowledge and intention.
Punishment under IPC Section 489C and BNS Section 180
| Provision | Conduct | Maximum punishment |
|---|---|---|
| IPC Section 489C | Possession of forged or counterfeit currency notes or bank notes with the prescribed knowledge and intention | Imprisonment of either description up to 7 years, or fine, or both |
| BNS Section 180 | Possession of forged or counterfeit coins, Government stamps, currency notes or bank notes with the prescribed knowledge and intention | Imprisonment of either description up to 7 years, or fine, or both |
Practical examples
Example 1: Unknowing receipt of a counterfeit note
A customer receives a counterfeit note as change without knowing it is counterfeit. Mere receipt does not establish the offence; knowledge or reason to believe and the necessary intention must also be proved.
Example 2: Keeping fake notes to circulate
A person knowingly stores counterfeit notes intending to distribute them for use in transactions. If proved, these facts may satisfy the ingredients of Section 180 BNS.
Example 3: Suspected note reported instead of circulated
A shopkeeper discovers a suspicious note and promptly reports it to the appropriate authorities rather than attempting to spend it. Those circumstances may be relevant to whether the statutory intention existed.
Distinction between possession, circulation and counterfeiting
Possession under BNS Section 180 is distinct from counterfeiting under Section 178 and using or trafficking counterfeit items as genuine under Section 179. Section 181 deals with making or possessing instruments or materials for forging or counterfeiting covered items, and Section 182 concerns documents resembling currency notes or bank notes. The precise charge depends on the acts and evidence involved.
Which law applies: IPC or BNS?
The Bharatiya Nyaya Sanhita came into force on 1 July 2024. Offences allegedly committed before that date may continue to be governed by the IPC, subject to the relevant repeal, saving and transitional provisions. The date of the alleged conduct matters; an old IPC section number should not automatically be substituted in an existing proceeding without considering the applicable law.
Frequently asked questions
What is Section 489C IPC?
It criminalised possession of forged or counterfeit currency notes or bank notes where the person knew or had reason to believe they were counterfeit and intended that they be used as genuine.
What is the equivalent of IPC Section 489C under BNS?
Section 180 of the Bharatiya Nyaya Sanhita, 2023 addresses possession of forged or counterfeit coins, Government stamps, currency notes or bank notes with the requisite knowledge and intention.
What is the punishment for possessing counterfeit notes?
Under IPC Section 489C and the corresponding BNS Section 180, the maximum punishment is seven years of imprisonment, or a fine, or both.
Is merely finding a fake note an offence?
Mere accidental receipt or possession, without the required knowledge or reason to believe and intention to use it as genuine, does not by itself establish this offence.
Does the BNS apply to older cases?
The BNS generally applies to offences committed on or after 1 July 2024. Earlier conduct is assessed under the law applicable when the alleged offence occurred, subject to the relevant saving and transitional provisions.
Official legal sources
- India Code - Central Acts and statutory texts
- Ministry of Home Affairs - New criminal laws and notifications
- Reserve Bank of India - Currency information and public guidance
This article is for general legal information. The application of criminal law depends on the evidence, relevant statutory provisions and facts of each case. Last reviewed: 31 October 2026.