1. The facts of this case are relatively gross and in our considered view the police have virtually facilitated the acquittal of the accused through an incomplete investigation and if we may further amplify this statement through an unprofessional investigation. The facts of the case are very simple insofar as at about 5 p.m on 24-4-2000 the accused tendered a hundred rupees note against the payment of his bill at Hotel Santhosh in Mysore City. The Manager who was vigilant and doubted the genuineness of the note checked it on a machine and found that it was counterfeit or rather that it was a fake currency note. He immediately telephoned the police who came there and apprehended the accused. Before taking the accused to the Police Station the note was rechecked on the machine and the police satisfied themselves that it was a fake note. According to the prosecution after the accused was taken to the Police Station he was searched in the presence of the two Panchas and 21 other hundred rupees note were found on his person all of which corresponded to the original fake note.

2. In all therefore, the accused is charged with having been in possession of 22 such notes as also of having admitted to put one of them in circulation by passing it off as genuine. It is relevant to mention that apart from these notes that the accused also had in his possession 8 notes of hundred rupees and one note of fifty rupees all of which were found to be genuine. The charges in this case are confined to 22 fake notes and the user of one of them under Sections 489-B and 489-C of the IPC. The accused has denied the recovery and he has also denied the user of the note in question. The learned Trial Judge after having analysed the evidence produced before him has acquitted the accused on the ground that the prosecution has failed to prove the main ingredients of these offences viz., that the accused knew or had reason to believe that the notes in question were counterfeit. The acquittal of the accused has been assailed through the present appeal.

Page: 223. We have heard the learned Additional State Public Prosecutor at length and on merits. The reason for this is because there is a pure point of law involved in this case and unless the appellant-State is able to satisfy the High Court that it can overcome the infirmities in law which have been noted by the Trial Court there can be no question of disturbing the order of acquittal. It is for this reason that we have reviewed the record and heard the learned Counsel both on facts and in law.

4. We straightaway accept the submission canvassed on behalf of the State that regardless of the denial of the accused that the evidence of the Manager and Proprietor of the hotel P.Ws 1 and 2 corroborated by the evidence of the 1.0 who is P.W 8 that the prosecution has fully established that on the day in question i.e, 24-4-2000 at 5 p.m the accused did tender one note of Rs. 100/- at the Hotel Santhosh towards the payment of his bill, that this note was examined and found to be fake, that the police were called for and that the accused was apprehended virtually red-handed.

5. One of the submissions canvassed on behalf of the accused before the Trial Court was that in the aforesaid background the accused ought to have been searched at that spot itself and that the alleged recovery of the remaining notes at the Police Station is doubtful because both the Panchas have turned hostile. While the latter position is true, in cases of this type the Supreme Court has clarified the position in law that the recovery panchanama can be proved through the evidence of the I.O in cases where the Panchas did not support it and the Court will accord the requisite evidentiary value to the document in question. We are inclined to uphold the submission canvassed by the learned Government Advocate that the subsequent recovery at the Police Station is only a continuation of the recovery of the note from the accused at the hotel and that it is a logical sequence and as long as the recovery of the first note is established, that the subsequent recoveries only add to the gravity of the charge but are not absolutely essential for the same. We are convinced from the record however that the recoveries have in fact taken place and the fact that the search was not made at the hotel in the special facts and circumstances of this case is innocuous and of no consequence.

6. What transpires thereafter is unfortunately the most disastrous aspect of the prosecution case. Firstly, it does appear from the record that the I.O did send the notes for expert opinion but this opinion which is Ex. P. 5 was tendered through the I.O In our considered view, particularly in a case like this where knowledge is of paramount legal consequence it was absolutely unpardonable on the part of the prosecution not to have summoned the expert to give evidence. The first reason for this is because in the present case it would be too hazardous to base a conviction on Ex. P. 5 without this having been substantiated by the expert. The more important reason for it is because if that report Ex. P. 5 which is a highly incriminating document is to be used as Page: 23the main foundation for a conviction against the accused, then the prosecution was duty-bound to have summoned the author of this document so that the accused could have had a fair opportunity of testing its veracity. While it is not open to us to assail the correctness of Ex. P. 5 what we need to point out is that we cannot at the same time accord this document the weight of evidentiary value that would clearly attach to it for the reasons that have already been incorporated by us. This factor goes heavily against the prosecution.

7. What is virtually fatal to the prosecution is the fact that the I.O has admitted in cross-examination that despite the accused having been remanded to the police custody and despite his having had an opportunity to do a detailed and in-depth investigation, that nothing further has emerged. It was very necessary for the prosecution to have investigated into the source or origin of the fake notes for two reasons. Firstly, if the investigation indicated that the accused had obtained the fake currency notes from some other party who was either producing them or dealing in them then the guilty knowledge would have been established. In the absence of that, it is customary for the accused to turnround and state that the notes were received in the normal course of circulation and that the accused did not know that some of the notes were fake and that he had tendered the same in good faith and when such a plea is taken up, having regard to the fact that there is a presumption of innocence in favour of the accused it is the duty of the prosecution to establish the guilty knowledge. We need to go a stage further and point out that since there is every possibility of an innocent party coming into possession of fake currency if it is in circulation, the law has embodied or incorporated the safety provision in Sections 489-B and 489-C to the effect that the prosecution has to establish that the accused knew or had reason to believe that the currency was fake and that it is for this reason that the investigating authority ought to have done a further in-depth investigation with regard to the source. Not having done this, the police have virtually provided the accused with an escape route which he has very happily used in the present trial.

8. The second aspect of the fault on the part of the investigating authorities emerges from the fact that while ascertaining the source of the fake currency if it was found that some other person was producing the currency or circulating it and that the accused was only an agent, that would have still established the guilty knowledge. The last aspect of the matter is that if for any reason the investigation revealed that the accused himself was the author of the fake currency then, on the basis of that evidence it would have been impossible for the accused to contend that the possession and user were both innocent. The fact that the police have not persisted with the investigation and not gone to the source of the currency is absolutely fatal to the prosecution and as incorporated by us earlier, this is a gaping void in the prosecution case which is totally destructive.

Page: 249. The learned Counsel has vehemently submitted that from the facts and circumstances of this case this Court is fully justified in recording a presumption that the accused knew that the 22 hundred rupee notes were fake, his submission being that they were found in a relatively large number and consequently what the learned Counsel submits is that it was for the accused to have tendered a sufficiently acceptable explanation and in the absence thereof, that an adverse inference ought to have been drawn. Unfortunately, this is not the scheme of the law because Sections 489-B and 489-C for the reasons indicated by us earlier, clearly prescribe that as far as these cases are concerned that the onus is on the prosecution and that therefore, the submission in question cannot be upheld. We do share the view as put forward by the learned Counsel that these are serious offences, that they are economic offences, that the consequences are not only grade but are disastrous and that when detected they must be rigorously punished. All that we can say is that the duty of carrying out the pretrial investigation is invested with the police and it is for the police to act more responsibly and more professionally and it is for the police to ensure that the investigation is properly conducted, that requisite evidence is produced before the Court and it is only in those circumstances that a conviction can be recorded. Where the prosecution case suffers from major infirmities of the type that have been listed by us in this judgment, a conviction in law becomes not only incorrect but it would be impossible. It is in this background and virtually with a degree of regret that we need to record that the order of acquittal will have to be confirmed virtually be default.

10. Having regard to the fact that defects of this type have been occurring with a degree of regularity, we consider it very necessary that the Director General of Police take special cognisance of the errors/negligence that is being displayed in this vital field and that special instructions be issued to all the investigating authorities in the State on the basis of the observations of this Court to ensure that in all cases of this category the investigation along the lines incorporated by us is carried out and more importantly, that the Investigating Officer study the law, understand the necessary ingredients and ensure that the investigation is in consonance with these requirements. Registrar General to forward a copy of this judgment to the Director General of Police and the Director (Prosecutions) who is directed to report back to this Court within 4 weeks with regard to the corrective steps taken.

11. The office objection indicates that there is some delay in the presentation of this appeal. We waive the filing of a formal interlocutory application on the basis of the submissions made by the learned Additional State Public Prosecutor. The delay in question is condoned. Cri. A. No. 1139 of 2003 fails on merits and stands dismissed.