1 jg.cri.appeal 880.22 & 281.23.odt

IN THE HIGH COURT OF JUDICATURE AT BOMBAY,

NAGPUR BENCH, AT NAGPUR.

Criminal Appeal No. 880 of 2022

(1) Sheikh Gaffar @ Abdul Gaffar

S/o Sheikh Mussa,

Age about :- 45 Years,

Occupation :- Nil

R/o Bhai Pathar, Tah. Jiwati,

Dist. Chandrapur.

(2) Sheikh Sattar S/o Sheikh Mussa,

Age about :- 32 Years,

Occupation :- Nil

R/o Bhai Pathar, Tah. Jiwati,

Dist. Chandrapur. … Appellants

- Versus -

State of Maharashtra

through Police Station Officer,

A.T.S. Mumbai. … Respondent

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Mr. A. R. Rawlani, Advocate for the appellant no. 1 with

Mr. S. R. Kadam, Advocate for the appellant no. 2

Mr. P. K. Sathianathan, Special P.P. with Mr. D. M. Mehta, Advocate for

the respondent

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

with

Criminal Appeal No. 281 of 2023

(1) Mir Anwarul S/o Mir Hussain,

Aged about : 37 years, Occ. : Nil

R/o : Meera Gram, Tah. Meera Gram,

District : Malda, West Bengal

(2) Mohd. Obedulla @ Abdul Haq

s/o Sakir Ali,

Aged about : 40 years, Occ. : Nil

R/o : Village Laxmipur, P.S. Kaliachak,

District : Malda,

West Bengal. … Appellants 2026:BHC-NAG:3511-DB

2 jg.cri.appeal 880.22 & 281.23.odt

- Versus -

The State of Maharashtra

through its Police Station Officer,

A.T.S. Mumbai. … Respondent

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Ms. S. S. Gandhi with Mr. R. S. Akbani, Advocates for the appellants

Mr. P. K. Sathianathan, Special P.P. with Mr. D. M. Mehta, Advocate for

the respondent

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

CORAM : ANIL L. PANSARE AND

NIVEDITA P. MEHTA, JJ.

Date : 26-02-2026

ORAL JUDGMENT (Per : ANIL L. PANSARE, J.)

The appellants, original accused nos. 1 to 4 have assailed

the judgment and order dated 14-11-2022 passed by the Additional

Sessions Judge-4 and Judge, Special Court, ATS, Nagpur in Sessions

Trial Case No. 69/2016 whereby accused no. 1 - Mir Anwarul S/o Mir

Hussain (appellant no. 1 in Criminal Appeal No. 281/2023), accused

no. 2 - Sheikh Gaffar @ Abdul Gaffar S/o Sheikh Mussa (appellant no. 1

in Criminal Appeal No. 880/2022) and accused no. 3 - Sheikh Sattar

S/o Sheikh Mussa (appellant no. 2 in Criminal Appeal No. 880/2022)

were convicted for the offences punishable under Sections 489-B,

489-C, 120-B read with Section 489-B and 120-B read with Section

489-C of the Indian Penal Code (IPC) and under Sections 16 and 18 of

the Unlawful Activities (Prevention) Act, 1967 (for short ‘UAPA Act’).

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The trial Court imposed punishment maximum of which is 12 years and

total fine of Rs. 16,00,000/- for different offences.

Accused no. 4 - Mohd. Obedulla @ Abdul Haq S/o Sakir Ali

(appellant no. 2 in Criminal Appeal No. 281/2023) was convicted for

the offences punishable under Sections 120-B read with Section 489-B

and 120-B read with Section 489-C of the IPC and under Section 18 of

the UAPA Act and the trial Court imposed punishment maximum of

which is 12 years and total fine of Rs. 15,00,000/- for different offences.

2. The prosecution’s case is that on 4-10-2015, the ATS

Nagpur received reliable information that a person aged about 30–32

years wearing a red T-shirt and carrying a black sack was coming to

Nagpur from Malda by Shalimar Express carrying counterfeit Indian

Currency Notes for distribution in Nagpur city. Accordingly ATS Nagpur

laid a trap on Platform No.7 at Nagpur Railway Station and at about

1.15 p.m. the accused no. 1 Mir Anwarul was detained after being

pointed out by the informant. On search of his sack bag in presence of

panchas, bundles of currency notes wrapped in cloth and polythene

were found. He was unable to give satisfactory explanation. He was

taken to GRP Police Station and detailed checking of the bag revealed

620 counterfeit currency notes of Rs. 1000/- denomination and 582

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counterfeit currency notes of Rs. 500/- denomination totaling to

Rs. 9,11,000/-.

Crime was then registered under Sections 489-B and 489-C of

the IPC and the accused was arrested. The fake currency notes were

sent for examination to Currency Note Press, Nashik and the report

confirmed that all the currency notes were high quality counterfeit

notes and, therefore, offences under Sections 15, 16 and 18 of the

UAPA Act were added and investigation was taken over by ATS Mumbai.

During investigation, it was revealed from documents and bank

statements that accused No. 2 Abdul Gaffar Sheikh frequently deposited

cash in the bank account of accused No.1 and he was going to handover

fake currency notes to accused No. 2. On 18-11-2015, ATS Nagpur

received information that accused No.2 along with another person was

present near waiting room at Nagpur Railway Station and both were

detained and identified as Abdul Gaffar Sheikh (Accused No. 2) and

Sheikh Sattar (Accused No.3). In personal search of accused No. 2, 20

counterfeit currency notes of Rs. 500/- denomination were found and in

the bag of accused No. 3, 124 counterfeit currency notes of Rs. 1000/-

denomination and 752 counterfeit currency notes of Rs. 500/-

denomination totaling to Rs. 5,10,000/- were found. The seized notes

were sent for expert opinion and the report confirmed that all the notes

were high quality counterfeit notes.

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Investigation further revealed that accused No.1 and accused

No.4 Mohammad Obedullah had maintained bank accounts for

receiving money for supplying counterfeit currency notes and accused

No.1 used to procure fake currency notes and hand them over to

accused Nos.2 and 3 for circulation. Bank statements and mobile call

records showed frequent transactions and communication between the

accused persons and total counterfeit currency notes seized from

accused Nos.1 to 3 were valued at Rs. 14,21,000/-.

Charge sheet was initially filed against accused Nos. 1 to 3 and

the case was committed to Sessions Court while further investigation

continued against accused No.4. He was later arrested in another fake

currency case and was brought to Nagpur on production warrant.

Investigation revealed that accused No.4 was supplying counterfeit

currency notes to the remaining accused persons. After obtaining

necessary sanction supplementary charge sheet was filed against

accused No.4.

The accused persons/appellants pleaded not guilty. Prosecution

examined 31 witnesses. The trial Court, after taking into consideration

the material placed before it and upon hearing both sides, held the

appellants guilty of offence. This finding is challenged by the

appellants.

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3. Learned counsels for the appellants submit that the

appellants are in jail for more than ten years and, therefore, are not

really challenging the judgment on facts. The argument is that the trial

Court committed error of law in imposing sentence of twelve years for

the offence punishable under Section 489-B of the IPC. The counsels

have invited our attention to Section 489-B of IPC, which reads thus :-

[489-B. Using as genuine, forged or counterfeit currency-

notes or bank-notes.-Whoever sells to, or buys or receives

from, any other person, or otherwise traffics in or uses as

genuine, any forged or counterfeit currency-note or bank-

note, knowing of having reason to believe the same to be

forged or counterfeit, shall be punished with [imprisonment

for life], or with imprisonment of either description for a term

which may extend to ten years, and shall also be liable to

fine.]

As could be seen, the offence is punishable with imprisonment

for life or with imprisonment of either description for a term which may

extend to ten years and is also liable to fine.

4. The argument is that Section 489-B of IPC does not provide

for sentence of imprisonment for 12 years. The trial Court could either

has imposed sentence of imprisonment for life or of imprisonment up to

10 years.

5. We find substance in the aforesaid submission. The

punishment provided under Section 489-B is either with life

imprisonment or for a term which may extend to ten years. The trial

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Court chose to not impose the punishment of imprisonment for life. The

other option that was available was, therefore, to impose punishment of

imprisonment up to ten years. The trial Court, however, imposed

sentence of imprisonment for twelve years, which is not provided for.

Order to that extent is apparently illegal. Accordingly, the sentence will

have to be reduced to ten years.

6. Another argument is that ingredients of Section 15 of the

UAPA Act are not established to punish the appellants under Section 16

or 18 of the UAPA Act. The trial Court has held the appellants guilty of

offence as spelt out under Section 15(1)(a)(iiia) of the UAPA Act, which

reads thus :-

[15. Terrorist act.-[(1)] Whoever does any act with intent to

threaten or likely to threaten the unity, integrity, security,

'[economic security] or sovereignty of India or with intent to

strike terror or likely to strike terror in the people or any

section of the people in India or in any foreign country,-

(a) by using bombs, dynamite or other explosive

substances or inflammable substances or firearms or other

lethal weapons or poisonous or noxious gases or other

chemicals or by any other substances (whether biological

radioactive, nuclear or otherwise) of a hazardous nature or by

any other means of whatever nature to cause or likely to

cause-

(i) death of, or injuries to, any person or persons, or

(ii) loss of, or damage to, or destruction of, property; or

(iii) disruption of any supplies or services essential to the

life of the community in India or in any foreign country;

or

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[(iiia) damage to, the monetary stability of India by way

of production or smuggling or circulation of high quality

counterfeit Indian paper currency, coin or of any other

material; or]

(iv) damage or destruction of any property in India or in

a foreign country used or intended to be used for the

defence of India or in connection with any other

purposes of the Government of India, any State

Government or any of their agencies; or

(b) .........

7. The trial Court considered the case in the light of above

provisions and rendered following findings.

“90]As per Section 489 (B) trafficking is punishable in

addition to other act and under Section 489(C) possession of

counterfeit currency notes is punishable. The definition of

Terrorist Act under Section 15 of UAPA includes doing any Act

to threaten or likely to threaten the unity, integrity, security,

(economic security) of India by any other means whatever

nature to cause or likely to cause damage to the monetary

stability of the India by way of production or smuggling or

circulation of high quality counterfeit Indian paper currency.

As per explanation (b) to Section 15(1) high quality

counterfeit Indian currency means the counterfeit currency as

may be declared after examination by an authorised or

notified forensic authority that such currency imitates or

compromises with the key security features as specified in the

Third Schedule. As per Third Schedule security features to

define high quality counterfeit Indian currency notes are

Watermarks, Security thread and any one of the following

features :-

(a) Latent image, (b) See through registration, (c) Print

quality sharpness, (d) Raised effect, (e) Fluorescent

characteristics, (f) Substrate quality, (g) Paper taggant,

(h) Colour shift effect in OVI, (i) Colour shift effect in security

thread.

91] Then as per sub Section 2 of Section 15 the Terrorist Act

includes an Act which constitutes an offence within the scope

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of, and as defined in any of the treaties specified in the

Second Schedule.

92] The investigation of high quality counterfeit Indian

currency offences Rules 2013 are made by the Central

Government by virtue of power conferred on it as per Section

52 of UAPA. It consist of eight rules. Rule 5 clarifies what is

damage to the monetary stability of India. The rule 5 reads as

under :-

Damage to the monetary stability of India, referred to in

section 15 by way of production or smuggling or circulation

of high quality counterfeit Indian paper currency, shall be

deemed to have been caused, if in addition to other

considerations :-

(a) seizure is of high quality counterfeit Indian currency

of face value of such threshold amount as may be decided by

the Central Government from time to time, not being less

than rupees one lakh.

Provided that the said threshold limit shall not apply

when the counterfeit Indian currency has been intercepted at

the international border, international airport or Immigration

Check Post.

(b) the seized counterfeit currency includes any one of

the three highest denominations issued by the Reserve Bank

of India and in circulation at such point in time.

93] The meaning of Terrorist Act will have to be understood

for the purpose of punishment under Section 16 of UAPA in

light of provisions of Section 15, Third Schedule and under

Rule 5 of the above Rules of 2013. So counterfeit currency

seized should be from amongst three highest denomination in

circulation and it is fact of common knowledge that in 2015

the currency notes of Rs. 1000/- and Rs. 500/- were amongst

first to highest denomination in circulation in India. The

threshold amount as per Rule 5-a is not less than

Rs.1,00,000/- and apparently no other higher threshold

amount has been decided by the Central Government.

--------

103] Similarly as the currency notes were having face value

of Rs.9,11,000/-, they are high quality counterfeit currency

notes meeting the key security features as specified in the

third Schedule of UAPA, they are worth more than Rs. 1 Lakh

face value i.e. the threshold limit prescribed under Rule 5 (a)

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and of first two highest denomination as per Rule 5 (b) of the

Rule of 2013 supra. They fit in the definition of terrorist Act.

This terrorist Act is to threaten economic security of India and

likely to cause damage to the monitory stability of India by

way of circulation of high quality counterfeit paper currency

is also established from the evidence discussed below point

No. 7 and 8 i.e. conspiracy and to avoid repetition it is not

reproduced here.”

8. Thus, the trial Court held that to attract ingredients of

Section 15 of UAPA Act, the counterfeit currency seized should be from

amongst highest denominations in circulation. The currency under

question was Rs. 1,000/- and Rs. 500/- denominations, which

undisputedly were of highest denominations at the relevant time. The

trial Court held that the face value of threshold amount as per Rule

5(a) of the Investigation of High Quality Counterfeit Indian Currency

Offences Rules, 2013 (for short ‘Rules of 2013’) is not less than rupees

one lakh and no other higher threshold amount has been decided by the

Central Government. The trial Court then held that the seized currency

notes had a face value of Rs. 9,11,000/- which is more than rupees one

lakh as prescribed under Rule 5(a) and, therefore, it will fit in the

definition of ‘terrorist act’, which is an act to threaten economic security

of India and is likely to cause damage to the monetary stability of India.

9. The argument is that in absence of decision by the Central

Government, the trial Court committed an error by presuming the

threshold amount at rupees one lakh.

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10. As against, learned Special Public Prosecutor submits that

the trial Court finding does not require any interference on this count in

as much as the Central Government is not under obligation to decide

the threshold amount because the word ‘may’ is used in clause (a) of

Rule 5 of the Rules of 2013.

11. To understand rival submissions, we deem it appropriate to

reproduce Rule 5 of the Rules of 2013. It reads as under :-

5. Damage to the monetary stability of India. - Damage to the

monetary stability of India, referred to in section 15 by way of

production or smuggling or circulation of high quality

counterfeit Indian paper currency, shall be deemed to have

been caused, if in addition to other considerations, -

(a) seizure is of high quality counterfeit Indian currency

of face value of such threshold amount as may be decided by

the Central Government from time to time, not being less

than rupees one lakh:

Provided that the said threshold limit shall not apply

when the counterfeit Indian currency has been intercepted at

the international border, international airport or Immigration

Check Post;

(b) the seized counterfeit currency includes any one of the

Inotes of denomination of One hundred rupees and abovel

issued by the Reserve Bank of India, and in circulation at such

point in time.

Thus, Rule 5 refers to damage to the monetary stability by way

of production or smuggling or circulation of high quality counterfeit

Indian paper currency. It provides that such damage shall be deemed to

have been caused, if in addition to other considerations, seizure is of

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high quality counterfeit Indian currency of face value of such threshold

amount as may be decided by the Central Government from time to

time. It further provides that the threshold amount should not be less

than rupees one lack.

12. Clause (a) of Rule 5 provides that the threshold amount of

seized counterfeit currency should not be less than rupees one lakh,

which in a way indicates that the amount lesser than rupees one lakh

has no potential to damage the monetary stability of India. In the

circumstances, it is only when the Central Government takes a decision,

which may vary from time to time, to fix threshold amount in context

with monetary stability of India, the investigating agency and in turn,

the Court will be in a position whether the amount seized is capable of

damaging the monetary stability, of course for the purpose of attracting

Section 15 of the UAPA Act. In this context, clause (a) of Rule 5 only

provides that it should not be less than rupees one lakh, meaning

thereby, it can be anything more than rupees one lakh, which decision is

to be taken by the Central Government.

13. The decision on this point is important to attract

ingredients of Section 15 of the UAPA Act which defines ‘Terrorist act’,

which is an offence punishable for a terms not less than five years but

which may extend to imprisonment for life, and shall also be liable to

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fine. It is thus a stringent provision and therefore, prosecution will

have to establish a case strictly in terms of the provisions. It was thus

obligatory for the prosecution to place on record the decision of the

Central Government on threshold amount at the relevant time. The

argument of prosecution that the decision is not mandatory is,

therefore, unsustainable and is accordingly rejected. It did not produce

it before trial Court and despite giving opportunity before us also.

14. Further, the judgment of the trial Court does not suggest

that while invoking Section 15 of the UAPA Act read with Rule 5 of the

Rules of 2013, it has considered any other additional material. The

guilt is attributed to the appellants only on the count that the amount of

counterfeit currency seized was more than rupees one lakh. The trial

Court thus failed to consider importance of the value of the threshold

amount, having potentential to cause damage to the monetary stability

of India to attract ingredients of Section 15 of the UAPA Act. The

conviction to that effect viz. conviction under Section 15 read with

Sections 16 and 18 of UAPA Act is, therefore, unsustainable.

15. Learned counsels for the appellants then submit that fine

amount may be reduced. According to the appellants, they are

labourers and, therefore, leniency should be shown.

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16. We are not inclined to show leniency. Learned Special

Public Prosecutor is correct in contending that the appellants were

found in possession of high quality counterfeit currency notes valued at

about Rs. 14,00,000/-. The amount is frequently deposited in the bank

account. Thus, they have handled huge amount, which labourers would

not. In any case considering their role, which is detailed in the

judgment of the trial Court, we are not inclined to reduce the amount of

fine. Further, the reversal of finding of trial Court on conviction under

Section 16 and 18 will reduce the amount of fine imposed under said

provisions, which in itself is a substantial amount (Rs. 6,00,000/- each).

Thus, relief of reduction in fine amount is even otherwise granted.

Further reduction is not justified.

17. For the above reasons, the appeals are partly allowed. The

conviction of appellants under Sections 16 and 18 of the UAPA Act is

quashed and set aside. The appellants are hereby acquitted for the

offence punishable under Sections 16 and 18 of the UAPA Act. The

sentence imposed by the trial Court for the offence punishable under

Section 489-B of the IPC is reduced to ten years. Rest of the order

stands intact.

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18. The appeals are disposed of in terms of above.

(NIVEDITA P. MEHTA, J.) (Anil L. Pansare, J.)

wasnik