Recovery of counterfeit currency without proof of mens rea or independent witnesses cannot sustain criminal conviction.

The Appellants were apprehended on 11.09.2013 by the Special Operations Group, C.I.D., West Bengal, near the Sarat Colony More flyover based on source information

The prosecution alleged that 200 pieces of Fake Indian Currency Notes (FICN) in denominations of ₹500 (totaling ₹1,00,000) were recovered from their possession

The Trial Court convicted them under Sections 489B (using/trafficking), 489C (possession), and 120B (conspiracy) of the Indian Penal Code (IPC), sentencing them to 4 years of rigorous imprisonment

The Appellants challenged the conviction on grounds of procedural irregularities, lack of independent witnesses, and failure to prove mens rea

1. Whether the prosecution established the essential ingredients of "knowledge" or "reason to believe" that the currency notes were counterfeit as required under Sections 489B and 489C of the IPC

2. Whether the lack of independent witnesses and procedural discrepancies in search, seizure, and documentation vitiated the conviction

3. Whether a charge of criminal conspiracy under Section 120B can be sustained merely on the basis of joint possession without proof of a prior meeting of minds

Sections 489B and 489C of the IPC, which require not just possession of FICN but "conscious possession" accompanied by the mens rea that the notes are forged and an intention to use them as genuine

Section 120B of the IPC, noting that conspiracy requires a "meeting of minds" or a pre-arranged plan

Safeguards under the Code of Criminal Procedure regarding search and seizure, as well as the evidentiary bar under Sections 25 and 26 of the Indian Evidence Act, which renders confessions made to police officers inadmissible

The principle that if two reasonable views exist, the one favorable to the accused must prevail

The Court observed that the prosecution’s case rested entirely on the testimony of interested police witnesses despite the incident occurring in a busy commercial area with many shops; no independent witnesses were joined, nor were notices served on the public

Serious procedural lapses were noted: the seizure list lacked departmental or Gazetted Officer seals, no "nil seizure list" was prepared, and there was a discrepancy in the Command Certificate numbers between the complaint and the seizure list

The Court found that the prosecution failed to prove mens rea; there was no evidence that the appellants attempted to circulate the notes or knew they were fake, as mere recovery does not satisfy the statutory requirement of "reason to believe"

The expert report of PW-5 proved the notes were fake but did not bridge the gap regarding the accused’s intent

Joint presence alone was insufficient to prove a conspiracy under Section 120B

The Court set aside the judgment and order of conviction dated 19.09.2014 & 20.09.2014. The Appellants were acquitted of all charges and ordered to be discharged from their bail bonds. The appeals were allowed.