1. This appeal has been filed under Section 374(2) of the Code of Criminal Procedure, 1973 by the appellant, who is the 1st accused in S.C.No.548/2006 on the files of the Ist Additional Sessions Court, Kollam, challenging the conviction and sentence imposed against him in the above case, dated 03.07.2007.

2. Heard the learned counsel for the appellant/1st accused as well as the learned Public Prosecutor. Perused the judgment under challenge along with the records of the trial court.

3. Here, the prosecution alleges commission of offences punishable under Sections 120B, 489B and 489C r/w 34 of the Indian Penal Code (for short, ‘the IPC’ hereinafter), by accused Nos.1 to 3. In this matter, accused No.2 died during trial.

4. The prosecution case is that accused Nos.1 to 3, in furtherance of their common intention, were engaged in trafficking counterfeit currency notes of the denomination of ₹100. The 3rd accused allegedly procured counterfeit ₹100 currency notes from an unknown source and handed over the same to accused Nos.1 and 2 for circulation and exchange. At about 8.00 p.m. on 07.10.1999, accused Nos.1 and 2 allegedly visited the tea shop of PW1 situated in Sasthamcotta Junction. After having food, the 1st accused tendered one of the counterfeit ₹100 currency note at the cash counter. PW1 suspected the note to be counterfeit and informed PW7, the Sub Inspector of Police, Sasthamcotta. Thereupon, PW7 and his party reached the spot and seized the currency notes from the possession of the 1st accused. On this premise, the prosecution alleges commission of the above offences by accused Nos.1 to 3.

5. In this matter, the trial court framed charge for the said offences and proceeded with trial. During trial, PW1 to PW12 were examined and Exts.P1 to P8 and MO1 series were marked on the side of the prosecution. DW1 was examined and Exts.D1 to D5 were marked on the side of the defence.

6. On a meticulous analysis of evidence, while acquitting the 3rd accused, the learned Sessions Judge sentenced the appellant/1st accused as under:

                   “(1) Accused No.1 is sentenced to undergo rigorous imprisonment for a period of two years and a fine of Rs.4000/- and in default to undergo imprisonment for a period of two months U/s.489(B) IPC.

                   (2) Accused No.1 is sentenced to undergo rigorous imprisonment for a period of one year and a fine of Rs.2000/- and in default to undergo imprisonment for a period of one month U/s.489(C) IPC.

                   (3) The period of detention, if any, undergone by the accused No.1 in this case will be set off against the substantive sentence of imprisonment.

                   (4) The sentences shall run concurrently.”

7. Three specific anomalies are pointed out by the learned counsel for the appellant/1st accused while attempting to assail the impugned judgment. The first point argued is that, as per the prosecution allegation and as per the evidence given by PW1, accused Nos.1 and 2 attempted to exchange one fake note out of MO1 series notes, viz., four numbers of fake currency notes of the denomination of ₹100 and PW7 reached the place of occurrence on getting information given by PW1 and he had recovered the said notes by preparing Ext.P1. According to him, on 12.10.1999, the investigation was entrusted to PW2. It was thereafter, on 21.10.1999 only, the counterfeit notes (MO1 series) were produced before the court as evident from Ext.P2 property list. Therefore, the same is fatal, since the possibility of manipulation of the counterfeit currency notes by the Investigating Officer could not be ruled out. In such a case, benefit of doubt shall be adjudged in favour of the appellant/1st accused. Apart from that, the learned counsel also pointed out that on reading Ext.P1 mahazar, whereby MO1 series notes recovered by PW7, the same does not show from where the notes were recovered apart from generally saying that it was recovered from his possession. He also pointed out anomaly regarding the time of occurrence, as stated by PW1 in tune with the mahazar.

8. The learned Public Prosecutor would submit that there is sufficient evidence to sustain the conviction of the appellant/1st accused. The evidence of the shopkeeper, PW1, who identified the 1st accused at the dock while deposing before the court regarding the use of counterfeit currency note by the appellant/1st accused is sufficient to sustain the conviction. Further, the evidence of the police officer, PW7, who gave clear evidence regarding the seizure of MO1 series counterfeit currency notes from the possession of the accused, provides corroboration.

9. Adverting to the rival arguments, the points arise for consideration are;

                   (i) Whether the Sessions Court was right in holding that the appellant/1st accused committed offence punishable under Section 489(B) of the IPC?

                   (ii) Whether the Sessions Court was right in holding that the appellant/1st accused committed offence punishable under Section 489(C) of the IPC?

                   (iii) Whether the verdict would require interference?

                   (iv) The order to be passed?

Point Nos.(i) to (iv)

10. In this case, the learned Sessions Judge mainly relied on by the evidence of PW1 supported by PW7 and PW12 along with other evidence and Ext.P5 expert report to find that the appellant/1st accused possessed MO1 series four numbers of fake currency notes, for the denomination of Rs.100/- and used one out of the same. As regards to the allegation that the appellant/1st accused possessed and used counterfeit currency notes for the denomination of Rs.100/-, the prosecution heavily relied on the evidence of PW1, the owner of Sheeba Hotel situated in Sasthamcotta Junction. According to him, the incident took place on 07.10.1999 and there was power cut in the area at the relevant time. He testified that the incident occurred between 7.30 p.m. and 8.00 p.m. There was good business in the hotel. Two persons came there and after taking tea, tendered a ₹100 currency note towards the payment of bill. On a cursory examination of the ₹100 currency note handed over by the 1st accused, he suspected that it was a counterfeit note. Immediately, he deputed a staff member of the hotel to go to the police station and inform the matter. At about 9.00 p.m., the police arrived at the hotel and questioned the accused. Three more counterfeit ₹100 currency notes were recovered by the police from the possession of the 1st accused. The counterfeit currency note tendered at the cash counter was also handed over to the police. Thereafter, the police prepared Ext.P1 mahazar and was a signatory to the said mahazar. He identified MO1 series as the counterfeit ₹100 currency notes recovered from the possession of the 1st accused. During cross-examination, he deposed that there was no telephone connection in the hotel at the relevant time. However, a telephone was available at a shop situated in the building opposite the hotel. Instead of making a telephone call to the police station, he had deputed a staff member to inform the police. He further stated that he had returned the ₹100 currency note to the 1st accused and demanded a genuine note. However, he had not disclosed this fact while giving his statement to the police. He maintained during cross-examination that the counterfeit note was tendered by the 1st accused at the cash counter during the power cut.

11. Another witness to the alleged occurrence was examined as PW2. He was the manager of the hotel during the relevant period. According to him, the incident took place at about 8.00 p.m. on 07.10.1999. The accused persons came to the hotel for tea. After taking tea, they tendered a ₹100 currency note at the cash counter. PW1 realised that the currency note handed over by the 1st accused was counterfeit. He returned the note to the 1st accused and demanded a genuine currency note. However, accused Nos.1 and 2 disagreed. Subsequently, the matter was intimated to the police. The police reached the hotel at about 9.00 p.m., arrested the accused, and seized the currency note that was entrusted by the 1st accused to PW1. They also conducted a body search of the 1st accused and recovered three more counterfeit ₹100 currency notes from his possession. Ext.P1 was the mahazar prepared by the police at the hotel. He identified the 1st accused as the person who had tendered the counterfeit currency note in the hotel. He also identified MO1 series. During cross-examination, PW2 stated that MO1 series appeared to be counterfeit notes, though they could be circulated during night-time. According to him, persons dealing with currency notes could easily identify them as counterfeit. He did not notice any specific identifying features of the 1st accused, nor did he specifically notice the dress worn by him.

12. According to PW3, the supplier of the hotel, he had been deputed by the owner to go to the police station to inform the occurrence and he deposed accordingly and he also identified the 1st accused as the person who had brought the counterfeit currency notes to the hotel.

13. PW4, another supplier in the hotel, also deposed before the court regarding the act of accused Nos.1 and 2 in tendering a counterfeit currency note at the cash counter after taking tea from Sheeba Hotel. He further stated that he had witnessed the police recovering three more counterfeit ₹100 currency notes from the possession of the 1st accused.

14. The Sub Inspector of Police, Sasthamcotta Police Station was examined as PW7. He stated that on 07.10.1999, while he was on patrol duty, he reached Sasthamcotta Junction at about 9.00 p.m. At that time, one Sabu informed him that two persons had been restrained by the owners of Sheeba Hotel for attempting to pass counterfeit currency notes. Immediately, he and his party proceeded to Sheeba Hotel and reached there at about 9.00 p.m. He found the shutter of the hotel partially closed. After knocking on the shutter, he entered the hotel. PW1 was seated at the cash counter. PW1 pointed out accused Nos.1 and 2, who were standing nearby, and informed him that they had attempted to tender a counterfeit ₹100 currency note after taking tea from the hotel. The currency note was handed over to him by PW1. On a prima facie examination, the note appeared to be counterfeit. He questioned accused Nos.1 and 2, who disclosed their identities. On conducting body search of the 1st accused, three more similar counterfeit ₹100 currency notes were recovered from his possession. Upon examining all the notes, he was satisfied that they were counterfeit. At about 9.15 p.m., a mahazar was prepared and the said currency notes were seized from the possession of the 1st accused. Both accused were arrested and taken to the police station. Ext.P1 mahazar was prepared by the Head Constable who accompanied him. On the strength of Ext.P1, a crime was registered against the accused. He further stated that, during interrogation, the 1st accused disclosed that the counterfeit notes had been supplied by the 3rd accused. Accordingly, on 08.10.1999, he proceeded to the residence of the 3rd accused and conducted a search. The 3rd accused was arrested for possessing a lethal weapon. A separate crime was registered against him under the provisions of the Arms Act. He was taken to the police station, where his confession statement was recorded. Subsequently, MO1 series, the counterfeit currency notes recovered from the possession of the 1st accused, were also produced before the court along with Ext.P2 property list. He identified Ext.P3, the report submitted by him before the court showing the address of the 3rd accused. He identified accused Nos.1 and 3 before the court. He also identified MO1 series. According to him, after conducting the preliminary investigation, he handed over the case records and connected documents to the officials of the CBCID (CFS Unit), Thiruvananthapuram.

15. PW7 was accompanied by a Police Constable, who was examined as PW5. He also deposed in tune with the version given by PW7. He identified MO1 series as the counterfeit currency notes recovered from the possession of the 1st accused when he allegedly attempted to exchange the same at the cash counter of Sheeba Hotel on 07.10.1999. He also identified the accused before the court.

16. The Head Constable of Sasthamcotta Police Station, who was present at the time of the recovery of MO1 series from the possession of the 1st accused, was examined as PW6. He reiterated the version given by PW7. According to him, Ext.P1 mahazar was prepared by him at the dictation and under the instructions of PW7 while they were at Sheeba Hotel, Sasthamcotta. He identified his signature in Ext.P1. He also identified MO1 series as the currency notes recovered from the possession of the 1st accused.

17. The investigation of the case was carried out by the officials of the CBCID (CFS), Thiruvananthapuram. A Police Constable attached to the Crime Branch CBCID Unit was examined as PW8. He stated that he had collected MO1 series from the court and produced the same before the Government Press, Nasik, for expert examination.

18. The detecting officer, who submitted the forwarding note before the court requesting that MO1 series be forwarded to the Government Press, Nasik, was examined as PW9. He stated that the forwarding note had been submitted by him before the court.

19. A part of the investigation was conducted by PW10, the Detective Inspector of CBCID (CFS) Unit, Thiruvananthapuram. During the course of his investigation, it was revealed that the accused had entered into a conspiracy to circulate counterfeit currency notes. Accordingly, he submitted a report before the court incorporating the offence punishable under Section 120B of the IPC. The remaining part of the investigation was carried out by PW12, another Detective Inspector of CBCID (CFS) Unit, Thiruvananthapuram. According to him, he submitted Exts.P6 to P8 reports before the court. He questioned the witnesses and recorded their statements during the course of investigation.

20. The final report was laid by PW11, another Detective Inspector attached to the CBCID (CFS) Unit, Thiruvananthapuram. According to him, the expert opinion received from the Government Press, Nasik, revealed that MO1 series were counterfeit currency notes. Ext.P5 is the expert report marked through this witness.

21. Here, the crucial point to be addressed is whether there is fatal delay in producing MO1 series before the court, as pointed out by the learned counsel for the appellant/1st accused. A perusal of Ext.P2 would show that even though the same was prepared on the next day i.e., on 08.10.1999, the same was received with initials of the learned Magistrate concerned on 21.10.1999. PW2 deposed that the investigation in this crime was taken over by him on 12.10.1999 and PW7 also given evidence that the investigation was transferred on 08.10.1999. During cross examination, PW7 given evidence that evidently as per Ext.P2, MO1 series reached the court only on 21.10.1999 and according to PW7, he had produced the same on 08.10.1999 itself, but the same was returned from the court concerned, since the learned Magistrate was on leave. At the same time, he had given evidence that no endorsement regarding its return could be found in the property list, marked as Ext.P2.

22. In the decision in Sathyan v. State of Kerala reported in [2026 KHC OnLine 481], this Court had occasion to consider the delay in producing the counterfeit currency notes before the court and it was held in paragraph No.8 as under:

                   “……….Inasmuch as cases where the nature of contraband or the nature of the offending substance would make the possessor and user of the same as an offender, prosecution has a duty to produce the disputed contraband to the court concerned at the earliest and within a reasonable time, which is justifiable; since the nature of contraband is decisive as far as the offence or offences committed by the accused is/are concerned. In such cases, delay in producing the contraband, here the counterfeit currency notes to the court within a period of six months and one year, would definitely a matter which would create strong doubts regarding detection and recovery of the counterfeit notes even though as per Ext.P6, the expert opined that M.O1 series are counterfeit currency notes. When the prosecution failed to produce the counterfeit notes before the court within a reasonable time and the same were produced within 6 months and one year the same definitely would be fatal to the prosecution and in such cases it is not fair to fasten criminal culpability on the accused since the recovery of counterfeit notes is in the midst of doubts because of its delayed production before the court.”

23. Here, the evidence would suggest that PW7 recovered the notes on 08.10.1999 and he had prepared Ext.P2 property list in this regard on 08.10.1999. Later, investigation was handed over to PW2 on 12.10.1999 and thereafter, on 21.10.1999, he had produced the counterfeit notes before the court. This delayed production of MO1 series notes by an officer, who, in fact, parted with the investigation of the crime creates doubt in the prosecution case and, in such a case, it is not safe to hold that the counterfeit notes alleged to have been recovered from the possession of the accused reached the court without tampering. The same would entitle benefit of doubt to the accused, as the prosecution has failed to prove its case beyond reasonable doubt in the matter of production of MO1 series notes in court within time, raising out the possibility of tampering the same. In such view of the matter, this appeal is liable to succeed.

In the result, this appeal stands allowed. The conviction and sentence imposed against the appellant/1st accused stand set aside and he is set at liberty forthwith. His bail bond stands cancelled.

Registry is directed to forward a copy of this judgment to the trial Court, for information.