The section contemplates that the offender must make or perform any part of the process of making or must buy or sell or dispose of, or must have in his possession any machinery, instrument or material for the purpose of being used, or knowing or having reason to believe that it is intended to be used for forging or counterfeiting any currency- note or bank-note. This section could be read along with sections 233, 234, 256, 257 and 485 of the Code, and the latter part of it makes preparation to commit a crime an offence. It is clear from the duration of the punishment that it is a grave offence.
Where litho stones were recovered from the possession of the accused but the prosecution failed to establish its firm link with the preparation of the currency-notes, he could not be held guilty under section 489-D of the Code. Similarly, where a printing machine was recovered from the land of the accused but its connection with the notes found in possession of the accused could not be established, he could not be convicted under this section.
In K. Hasim v. State of Tamilnadu, the Supreme Court observed that the language of section 489-D is very wide and would clearly cover a case where a person is found in possession of machinery, instruments, or materials for the purpose of being used for counterfeiting currency-notes and even though the machinery, instruments and materials so found were not at all the material particulars required for the purpose of counterfeiting.
The offence under this section is cognizable, non-bailable and non-compoundable, and is triable by court of session.