The explanation attached to the section says that for the purposes of sections 489-A, 489-B, 489-C, 489-D and 489-E, the expression ‘bank-note’ means a promissory note or engagement for the payment of money to bearer on demand issued by any person carrying on the business of banking in any part of the world, or issued by or under the authority of any State or Sovereign Power, and intended to be used as equivalent to money, or as a substitute for money.
The section contemplates that the offender must either counterfeit any currency- notes or bank-notes, or knowingly perform any part of the process of counterfeiting any currency-notes or bank-notes. The explanation explains that in sections 489-A to 489-E, the expression ‘bank-note’ means a promissory note or engagement for the payment of money to bearer on demand issued by any person who carries banking business anywhere in the world, or issued by or under the authority of any State or Sovereign Power, and intended to be used as equivalent to money, or as a substitute for money.
Since the expressions ‘currency-note’ and ‘bank-note’ in sections 489-A to 489-E have not been prefixed by the word ‘Indian’ the intention of the makers of the law is clear that these expressions are not limited to only Indian currency-notes and Indian bank-notes and that they include those of any other country of the world as well.
The purpose is to maintain market respectability and that the people must be assured that the notes which they are dealing with are not worthless pieces of paper. The Central Government, and not the State Government, is the appropriate authority empowered to remit sentences under sections 489-A to 489-E of the Code. The offence under this section is very serious as is apparent from the period of imprisonment.
In K. Hasim v. State of Tamilnadu? the Supreme Court ruled that this section not only deals with complete act of counterfeiting but also covers cases where accused performs any part of process of it.
The offence under this section is cognizable, non-bailable, and non-compoundable, and is triable by court of session.