Counterfeit currency possession proved by admissible recovery evidence, but trafficking was not established under the broader charge.

Credible recovery evidence, supported by customs officers, independent panch witnesses, an admissible voluntary statement under Section 108 of the Customs Act, and an intact chain of custody, can establish possession of counterfeit currency. The counterfeit nature of the notes was confirmed by expert report, so the broader allegation was not accepted in full. However, the evidence did not prove sale, purchase, receipt or trafficking of counterfeit currency, which are necessary for Section 489B IPC. The proved facts satisfied Section 489C IPC, making possession with knowledge sufficient for conviction on that charge.

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Issues: (i) Whether the acquittal required interference in appeal on the basis of the evidence relating to recovery and seizure of counterfeit currency notes; (ii) Whether the evidence established the offence under Section 489B of the Indian Penal Code, 1860 or only the offence under Section 489C of the Indian Penal Code, 1860.

Issue (i): Whether the acquittal required interference in appeal on the basis of the evidence relating to recovery and seizure of counterfeit currency notes.

Analysis: The recovery was proved through the consistent testimony of the customs officers and independent panch witnesses. The statement recorded under Section 108 of the Customs Act, 1962 was found to be voluntary and admissible, and it corroborated the seizure from the respondent. The sealed packet was traced through the customs, BNP and CBI process, and the discrepancy in the count was explained as a human error without breaking the chain of custody. The counterfeit nature of the notes was also confirmed by the expert report.

Conclusion: The acquittal was rightly interfered with, and the prosecution case was accepted to the extent of the proved recovery of counterfeit notes.

Issue (ii): Whether the evidence established the offence under Section 489B of the Indian Penal Code, 1860 or only the offence under Section 489C of the Indian Penal Code, 1860.

Analysis: The evidence proved possession of counterfeit currency with knowledge and consciousness, but it did not establish sale, purchase, receipt or trafficking of counterfeit currency necessary for Section 489B of the Indian Penal Code, 1860. The proved facts, however, satisfied the ingredients of Section 489C of the Indian Penal Code, 1860.

Conclusion: The offence under Section 489B of the Indian Penal Code, 1860 was not proved, but the offence under Section 489C of the Indian Penal Code, 1860 was proved and the respondent stood convicted for that offence.

Final Conclusion: The appeal succeeded only in part by displacing the acquittal to the extent of Section 489C of the Indian Penal Code, 1860, while the broader charge under Section 489B of the Indian Penal Code, 1860 failed.

Ratio Decidendi: A voluntary and admissible statement under Section 108 of the Customs Act, 1962, coupled with a credible chain of custody and corroborative witness evidence, can sustain a conviction for possession of counterfeit currency under Section 489C of the Indian Penal Code, 1860 even where trafficking under Section 489B is not proved.

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