- Bookmark
- Share
- CaseIQ
Satyanarayana v. State Of Andhra Pradesh
Structured Summary of the Opinion — Anantanarayana Ayyar, J.
Factual and Procedural Background
This revision was filed by Guggilla Satyanarayana, the sole accused in S.C. No. 28 of 1958. He was charged before the Assistant Sessions Judge, Warangal with offences under sections 489-B and 489-C of the Indian Penal Code. The Assistant Sessions Judge convicted the accused of both offences and sentenced him to three years rigorous imprisonment on each count. On appeal (C.A. No. 233 of 1958) the Sessions Judge set aside the conviction and sentence under section 489-B but confirmed the conviction and sentence under section 489-C. The petitioner challenged the confirmation of conviction and sentence under section 489-C by filing this revision.
The prosecution case, supported by six witnesses, was that: Ramakka (PW4) complained that the accused owed her a gold maim and had not returned it despite demand. PW2 and PW3 went to Ladal village on 14-1-1958, questioned the accused, who said the jewel was not available and offered to pay its value (Rs. 240) plus interest (Rs. 60). The accused gave thirty ten-rupee notes; PW2 and PW3 suspected the notes were not genuine and returned them. The accused promised to return the jewel or money shortly.
The next day CI of Police (PW6) went to the village on information that the accused was in possession of counterfeit ten-rupee notes. He sent a memo to the Station House Officer and investigated. The accused gave a statement, reduced to writing as Ex. P-7, and led the police to his house where he produced a small steel case which he opened with a key from his pocket and produced thirty ten-rupee notes (M.O.I.), which were seized by the police by panchayatnama (Ex. P-7). A currency expert (PW1) found the notes to be counterfeit; the notes bore repeated identical numbers and lacked the usual watermark lettering.
At trial the accused denied making the statement to the CI of Police, produced the M.O.I. and denied owing any jewel or money to PW4. Two defence witnesses offered explanations of custody and a claim that PW4's husband owed money to the accused. The Assistant Sessions Judge convicted on both counts. The Sessions Judge on appeal accepted doubt in respect of the charge under section 489-B but upheld conviction under section 489-C. In this revision the High Court considered whether the prosecution had proved the knowledge/reason-to-believe and intention elements required by section 489-C.
Legal Issues Presented
- Whether the prosecution proved, beyond reasonable doubt, that the accused knew or had reason to believe that the seized currency notes were counterfeit, as required by section 489-C IPC.
- Whether the prosecution proved that the accused had the intention of using the seized counterfeit notes as genuine or that they might be used as genuine, the other essential ingredient of section 489-C IPC.
- Whether, after excluding inadmissible portions of Ex. P-7, the remaining admissible evidence was sufficient to justify conviction under section 489-C.
Arguments of the Parties
Appellant's Arguments
- The principal contention pressed on revision was that the prosecution had not proved that the accused had knowledge of, or reason to believe, that the notes were counterfeit.
- The appellant relied on precedent (Emperor v. Habu) to argue that the burden lay on the prosecution to prove that the accused knew the notes were forged at the time of passing them, and that mere possession did not shift any burden to the accused to explain possession.
- Similar authorities (Bur Singh v. Emperor; Abdul Ratunan v. Emperor) were invoked to emphasise that the prosecution must prove circumstances which lead clearly and irresistibly to the inference of guilty intention and that the court should not presume purpose solely from materials or instruments without evidence.
Respondent / State's Arguments
- The learned Public Prosecutor pointed to the accused's statement marked Ex. P-7, noting that it contained a portion where the accused said the notes kept in his house were "counterfeit notes." (The Sessions Judge, however, ruled that this portion was inadmissible.)
- The State relied on the totality of circumstantial evidence — production of the notes from a locked box (key in accused's pocket), the uniform nature and serial-number repetition of the notes, the manner of production soon after questioning, the denial by the accused of prior statements and his failure to provide a plausible innocent explanation — to argue that knowledge and intent were established.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Emperor v. Habu, 25 Cri. L. J. 935 (Sind) | Held that in a charge of using a forged note as genuine the burden is on the prosecution to prove that, at the time of passing the note, the accused knew it was forged; mere possession does not shift the onus to the accused to explain possession. | The Court recorded that the defence relied on this decision to argue that knowledge must be directly proved and that mere possession is insufficient; the Court nevertheless treated this principle as part of the legal background while examining circumstantial evidence. |
| Bur Singh v. Emperor, AIR 1931 Lah 24 | Held that the onus lies on the prosecution to prove circumstances which lead "clearly, indubitably and irresistibly" to the inference that the accused intended to foist counterfeit notes on the public. | The decision was cited for the proposition that prosecution must establish circumstances strongly supporting an inference of intent; the Court applied this standard in assessing whether the proved facts allowed the inference of intention in the present case. |
| Abdul Ratunan v. Emperor, 12 Cri. L. J. 377 (Mad) | Observed that where prosecution adduces no evidence that objects in possession are useful for counterfeiting, it is unjustified to rely on the court's own knowledge to presume the accused's purpose — the prosecution must prove intent from evidence, not from judicial presumption. | The Court cited this authority to underscore that intention cannot be presumed from the mere nature of objects without supporting evidence; it used the case as a caution but found that, unlike Abdul Ratunan, here there were circumstantial facts supporting the required inferences. |
| In re American, AIR 1951 Mys 34 | Held that if an accused, when confronted with evidence that counterfeit notes were hidden, keeps silent or denies the affair, it is reasonable to presume he secreted them or knew who had done so; it is unlikely he would shield another by silence. | The Court cited this decision to support the inference that the accused's conduct (denial and production only after questioning) could permissibly be viewed as corroborative of knowledge or awareness of the notes' character. |
| Public Prosecutor v. Kondal Rao, AIR 1939 Mad 96 | Found that possession of a large number of counterfeit notes (some carried on the person, others produced from the house on questioning) supported the only reasonable inference that the accused knew they were counterfeit and intended to use them as genuine or that they might be used as genuine. | The Court treated this Madras High Court decision as directly persuasive. It emphasised similar features in the present case (number and uniformity of notes, production from a locked place, immediate production on questioning) and relied on it to support the conclusion of knowledge and intent. |
| Kotayya v. Emperor, AIR 1947 PC 67 | Reiterated that where evidence has been admitted which ought not to have been admitted, the court must discard such evidence and consider whether sufficient evidence remains to justify conviction. | The Sessions Judge's rejection of the portion of Ex. P-7 which purported to be a confession (the words "which are counterfeited") was held to be in conformity with Kotayya. The Court applied the Kotayya principle by asking whether, after discarding inadmissible material, the remaining evidence sufficed for conviction. |
Court's Reasoning and Analysis
The Court proceeded by identifying the statutory ingredients of section 489-C IPC: (1) knowledge or reason to believe that currency notes are counterfeit; and (2) intention to use them as genuine or that they might be used as genuine. The Court stated that the prosecution must prove these ingredients, but that the proof need not necessarily be by direct evidence and may be inferred from surrounding circumstances.
The Court accepted that a portion of the accused's statement recorded as Ex. P-7 — the explicit assertion that the notes "are counterfeited" — was inadmissible and correctly rejected by the Sessions Judge in conformity with Kotayya v. Emperor. Applying Kotayya, the Court discarded inadmissible material and asked whether the remaining admissible evidence could support conviction.
The Court then examined the circumstantial facts proved by the prosecution and explained why those facts sustained the required inferences:
- The accused was found in possession of thirty counterfeit notes, all of the same type — a circumstance considered important in Public Prosecutor v. Kondal Rao.
- The notes were kept safely locked in a steel case in the accused's house, and the accused had the key in his possession, indicating control and custody rather than abandonment or disregard.
- The accused produced the notes from the locked box soon after questioning and, when confronted with evidence, denied having made a prior statement and offered no credible explanation of innocent possession.
- The accused did not assert an explanation such as holding the notes only to prevent their use by others, nor did he admit an innocent source of possession.
In light of authorities such as In re American and Public Prosecutor v. Kondal Rao, the Court held that these circumstances could properly lead to the inference that the accused knew or had reason to believe the notes were counterfeit and that he intended to use them as genuine or that they might be used as genuine. The Court therefore found no reason to differ from the findings of the courts below on these points.
The Court limited itself to the evidence on record and explicitly applied the rule of discarding inadmissible material before assessing sufficiency of the remaining evidence.
Holding and Implications
Holding: The Court CONFIRMED the conviction of the accused under section 489-C IPC but reduced the sentence. The conviction under section 489-B had already been set aside by the Sessions Judge on appeal.
Final disposition as recorded by the Court: the conviction under section 489-C is confirmed and the sentence is reduced to rigorous imprisonment for two years (from the original three years imposed by the trial court).
Implications: The direct effect is that the accused remains convicted under section 489-C and will serve a reduced sentence of two years RI. The opinion applies established principles concerning (a) the need to discard inadmissible evidence and then assess the adequacy of the remaining evidence (Kotayya), and (b) the permissible drawing of inferences from circumstantial facts (as illustrated by the cited authorities). The opinion does not state that it establishes any new legal principle beyond applying existing authorities to the present facts.
Anantanarayana Ayyar, J.:-
(1) This revision has been filed by guggilla satyanarayana, the sole accused in s. C. No. 28 of 1958. He was charged before the assistant sessions judge, warangal with offences under sections 489 - b and 489 - c, i. P. C. The learned assistant sessions judge found the accused guilty of both the offences and sentenced him to three years rigorous imprisonment on each count. The accused filed c, a. No. 233 of 1958 before the sessions judge, warangal. The latter set aside the conviction and sentence under section 489 - b. I. P. C. But confirmed the conviction and sentence under section 489 - c. I. P. C. The petitioner feels - aggrieved with the conviction and sentence which have thereby been confirmed and has, therefore, preferred this revision petition.
(2) The prosecution case, supported by six witnesses, was to the following effect. Ramakka (p. W. 4) complained to p. Ws. 2 and 3 who were workers in a mill at warangal, that the accused owed her a gold maim and had not returned it, in spite "of demand. P. Ws. 2 and 3 went to ladal village on 14 - 1 - 1958 and questioned the accused about the matter. The accused brought a mediator, one b. Istari (not examined as witness) , represented that the jewel was not available with him and offered to pay its value, namely rs. 240. 00. Accordingly, the accused also agreed to pay the interest of rs. 60. 00demanded by them. The accused then gave thirty ten - rupee currency notes. P. Ws. 2 and 3 examined the currency notes, suspected that those notes were not genuine and returned them to the accused. The accused promised to return the jewel or money in a day or two. P. Ws. 2 and 3 informed p. W. 4 and then went away.
(3) Next day at about 4 p. M. P. W. 6, the c. I. Of police, went to the village on information that the accused was in possession of counterfeit notes of ten - rupee denomination. He sent a memo to the station house officer, atmakur to register a case and he took up investigation. He reached ladal village with the s. I. Of police at 5 - 30 p. M. , sent for the accused and questioned him in the presence of two mediators, p. W. 5 and istari. The accused then gave a statement which the c. I. Of police reduced to writing as ex. P - 7. In pursuance of that statement, the accused took are c. I. Of police (p. W. 6) , p. W. 5 and others to his house, left them on the front pial, went inside the house and brought out a small steel case and opened it with a key, which he took out from his pocket. The accused then took out from inside the box, thirty ten - rupee notes (m. O. I) and produced them before p. W. 6, the c. I, of police seized them by means of a panchayatnama, ex. P - 7.
(4) The currency expert, p. W. 1 found the counterfeit notes to be false. Eight of the currency notes bore the identical no. A/23 - 185307. The other twenty - two notes bore the identical no. A/23 - 853071, they did not bear water - mark of lettering. The state emblem was embossed but not borne as water mark.
(5) When questioned in the committing court and the trial court, the accused denied having made statement to the c. I. Of police, and produced m. O. I and alleged that the version of p. Ws. 2, 3 and 4 was totally false and that he (accused) did not owe any jewel or money to p. W. 4 at all. He examined two defence witnesses, d. W. 1 deposed that the accused was taken away by the c. I. Of police, when the accused was at the house of mali patel. D. W. 2 deposed that p. W. 4s husband owed the accused same money and that he (accused) demanded it from p. W. 4.
(6) The learned assistant sessions judge believed that the prosecution had proved both offences beyond reasonable doubt and that the defence evidence did not rebut the prosecution evidence. He accordingly convicted and sentenced the accused. On appeal, the learned sessions judge held regarding the conviction under section 489 - b i. P. C. As follows; "the evidence of p. Ws. 2 and 3 that these notes are offered to them and that they were refused en the basis of a suspicion, that they were counterfeited cannot be readily accepted or acted upon. I am not free from reasonble doubt that the appellant used as genuine, currency notes that were counterfeited, that too with the knowledge that they were counterfeited or having reason to believe the same to have been counterfeit. "as regards the charge under section 489 - c, i. P. C. The learned sessions judge held that the only portion in ex. P - 7 (a) which was admissible in evidence was "the information he (appellant) stated that he has got 30 currency notes of ten rupee denomination in his house" and beyond that the remaining portion "which are counterfeited" was inadmissible could not be relied upon as a confession of the appellant, admitting his guilt of "possession" of counterfeit notes. But, all the same, he held that the evidence on record was sufficient to prove and did prove that the accused knew or had reason to believe that m. O. I was counterfeited notes and that the accused had kept them with the intention of using them.
(7) The only contention which has been pressed before me by the learned counsel for the appellant is that the prosecution evidence has not proved that the accused had knowledge or reason to believe that the notes were counterfeit notes and also the fact that the accused intended to use the same as genuine or that it might be used as genuine,
(8) The learned advocate for the accused relies on the decision in emperor v. Habu, 25 cri. L. J. 935 (sind) , wherein it was held by tile court of judicial commissioner, sind that where an accused person was charged with using as genuine, a forged note, the burden was on the prosecution to prove that, at the time when the accused was passing the note, he knew that it was a forged one and that mere possession of it by him did not place the burden on him to account for its possession and to prove his innocent possession thereof.
(9) In bur singh v. Emperor, air 1931 lah 24 it was held that the onus lay on the prosecution to prove circumstances which led clearly, indubitably and irresistibly to the inference that the accused had the intention to foist the currency notes on the public,
(10) In abdul ratunan v. Emperor, 12 cri. L. J. 377 at p. 381 (mad) sundara aiyar, j. Held as follows:
"i may at once state that no evidence whatever has been adduced in the case, either that the material objects in evidence are actually of any use for producing a counterfeit note or that the accused had them in his possession for the purpose of counterfeiting notes. The prosecution chose to leave it to the court to come to a judgment on the former question by means of the knowledge possessed by the presiding judge, and, i take it, expected the court also to presume the purpose and intention of the accused from the nature of the instruments in his possession. 1 can find no justification for pursuing such a course in this case."
In that case, the offence concerned was possession of instruments and materials for counterfeiting five - rupee currency notes, punishable under section 489 - d i. P. C. It was found, as a fact, that the material objects of which the accused was found in possession and the other circumstances proved, were not sufficient to show that the accused had the objects concerned for the purpose of counterfeiting.
(11) In in re, american, air 1951 mys 34 it was held to the following effect:
"if the accused charged under section 489 - c, penal code, when confronted with the large body of evidence to the effect that he took the police and showed them the place hidden from the public view where the counterfeit notes were secreted, kept silent or denied the whole affair, it would not be unnatural to presume that he had either secreted them there himself or knew who had dona so. It would also not be unreasonable to presume that if someone also to his knowledge had so secreted them it is not at all likely that the accused would be shielding him but would disclose the name of the latter."
In public prosecutor v. Kondal rao, air 1939 mad 96 the accused was found to be in possession of thirty - eight counterfeit ten - rupee currency notes knowing the same to be counterfeit. Thirty of them were tied up in a piece of cloth worn by him on his person and the remaining eight were produced by him from a box in his house soon afterwards on being questioned by the inspector as to whether he had any similar notes in his possession. The accused plea in the trial, that his possession of the counterfeit notes was for the purpose of foisting them on any one else, was found to be untrue. In those circumstances, the madras high court held that the only reasonable inference to be drawn was that the accused was in possession of those notes with the intention of using them as, genuine or that they might foe used as genuine.
(12) It is clear from the above decisions that the ingredients under section 489 - c i. P, c. Namely that the accused knew or had reason to believe the currency notes to be counterfeit and his intention to use the same as genuine or that it might be used as genuine, should be proved by the prosecution but that such proof need not be necessary by direct evidence, such as the evidence of p. Ws. 2 and 3 in the present case.
(13) The learned advocate for the accused contends that there is no evidence that the accused had knowledge that the notes were counterfeit. The learned public prosecutor points out that in the statement of thee accused, which was marked by the trial court as ex. P - 7, he (accused) has said that the notes which he had kept in his house were "counterfeit notes. " the learned sessions judge has rejected that portion in ex. P - 7 as inadmissible. Thereby, the learned sessions judge acted rightly and in conformity with the decision of the privy council in kotayya v. Emperor, air 1947 pc 67. In that decision, it was also observed:
"where in a case evidence has been admitted which ought not to have been admitted, it is the duty of the court to apply its mind to the question whether, after discarding the evidence improperly admitted, there is left sufficient to justify the conviction,"
(14) But there are various features in the evidence about these currency notes which show that the accused must have known or at least must have had reason to believe that the notes were counterfeit. As regards the intention which is contemplated and required for an offence under section 489 - c, i. P. C. The following facts which have been proved by the prosecution are important.
(15) The accused was found to have thirty counterfeit currency notes, all of the same type. This was a circumstance which was considered to be important by the madras high court in air 1939 mad 96. The accused had good reason to know and believe that the notes are counterfeit notes. He kept them safely locked in his house with, the key in his possession. It is not as it he left them in such a way as to show that he treated it as useless and not to be used. When confronted with the large body of evidence about his possession and the other facts referred to above, he denied having made statement and produced the notes. He did not come forward with any explanation that he had come into possession innocently or that he did not have any intention of using the notes or that he was keeping the notes under the lock and key so as to see that they were not used by anyone else as genuine. I see no reason to differ from the finding of both the courts below on the basis of the proved facts and circumstances that the accused had the intention of using the counterfeit currency notes as genuine or that it might be used as genuine. I therefore, confirm the conviction under section 489 - c. I reduce the sentence to r. I. For two years as i consider it sufficient to meet the ends of justice.
Alert