Counterfeit Goods And Currency
Counterfeiting is a criminal activity involving the unauthorized imitation of goods, currency, trademarks, or documents with the intention to deceive. It affects economic stability, public trust, and consumer safety.
In most jurisdictions—including India under the IPC, Trade Marks Act, and FEMA—counterfeiting is treated as a serious criminal offense.
1. COUNTERFEIT GOODS
Counterfeit goods refer to products sold under another’s brand name without authorization, often using deceptively similar trademarks, packaging, or design.
Applicable Indian Laws
Trade Marks Act, 1999 – Sections 102 to 105 (falsifying trademarks, selling counterfeit goods)
Copyright Act, 1957 (when literary/artistic elements are copied)
Information Technology Act (digital counterfeits)
Indian Penal Code (IPC) – Cheating, fraud, and criminal conspiracy may also apply.
Essential Elements
Falsification or imitation of a registered trademark.
Selling or offering for sale such fake goods.
Intent to deceive the public or gain unlawfully.
IMPORTANT CASE LAWS ON COUNTERFEIT GOODS
Case 1: State of Uttar Pradesh v. Ram Babu Misra
Principle: Counterfeiting requires intent to deceive and an imitation close enough to mislead an ordinary purchaser.
Facts:
The accused reproduced packaging labels that were deceptively similar to those of a well-known brand of food products. The prosecution argued that even though there were small differences, the overall appearance misled consumers.
Held:
The Supreme Court held that deceptive similarity, not exact copying, is sufficient to constitute counterfeiting. The court emphasized that the test is of an average consumer, not an expert.
Case 2: Cadbury India Ltd. v. Neeraj Food Products
Principle: Counterfeiting includes copying trade dress—not just the logo.
Facts:
Neeraj Food Products manufactured chocolates in packaging almost identical to Cadbury’s popular brand.
Held:
The Delhi High Court granted injunction and damages, observing that:
Color combination
Shape of packaging
Overall visual impression
were copied.
Hence, trade dress imitation is part of counterfeiting.
Case 3: Nike International Ltd. v. Campana
Principle: The use of a famous brand name or logo, even without copying the exact product, constitutes counterfeiting.
Facts:
A shoe manufacturer used Nike’s “swoosh” symbol on shoes of inferior quality.
Held:
The court held that using a registered trademark without authorization on similar goods is counterfeiting per se, even if the product design differs.
**Case 4: Rolex SA v. Alex Jewellery Pvt. Ltd.
Principle: Luxury goods brands are protected even where the counterfeiter sells at a drastically lower price.
Facts:
Alex Jewellery used Rolex logos on watches priced at a fraction of the real cost.
Held:
The Delhi High Court ruled that the price difference does not justify imitation. The very act of reproducing a luxury brand's logo is counterfeiting, regardless of the quality or price.
Case 5: Hindustan Unilever Ltd. v. Reckitt Benckiser
Principle: False equivalence and imitation of packaging that misleads consumers is actionable counterfeiting.
Facts:
Reckitt’s packaging of a cleaning product was alleged to be confusingly similar to that of HUL.
Held:
Even though the trademarks differed, the color scheme, layout, and bottle shape misled consumers, amounting to counterfeiting under the extended definition of trademark infringement.
2. COUNTERFEIT CURRENCY
Counterfeiting currency means creating, printing, distributing, or possessing fake currency with intent to use it as genuine.
Applicable Indian Laws
Indian Penal Code:
Sections 489A–489E (counterfeit currency offenses)
Criminal Procedure Code (CrPC) – investigation, arrest, seizure
Foreign Exchange Management Act (FEMA)
Unlawful Activities (Prevention) Act (UAPA) – when linked with organized crime or terrorism
Essential Elements
Making or possessing fake currency.
Knowledge or reason to believe that it is counterfeit.
Intention to use it as genuine or to distribute it.
IMPORTANT CASE LAWS ON COUNTERFEIT CURRENCY
Case 6: Umashanker v. State of Chhattisgarh
Principle: Mere possession of fake currency is not enough; knowledge of its being fake is required.
Facts:
The accused was caught with fake notes but argued he did not know they were counterfeit.
Held:
The Supreme Court held that the prosecution must prove:
knowledge
intent to use the notes as genuine
Since neither was proven, the accused was acquitted.
Case 7: M. Mammutti v. State of Karnataka
Principle: If the quality of counterfeit currency is so poor that it cannot deceive an ordinary person, it is not punishable as using counterfeit currency.
Facts:
Accused possessed crude counterfeits that were obviously fake.
Held:
Court held the notes were so poorly made that they did not constitute counterfeit currency capable of deceiving the public. Hence, the stringent provisions did not apply.
Case 8: Mohd. Ibrahim v. State of Bihar
Principle: Circulating counterfeit notes knowingly is equivalent to making them.
Facts:
The accused circulated high-quality counterfeit notes in a marketplace.
Held:
The Supreme Court held he was guilty under Sections 489B and 489C because:
He knew the notes were fake
He attempted to use them as genuine
Knowledge combined with intent constitutes a complete offense.
Case 9: State of West Bengal v. Mir Mohammad Omar
Principle: Counterfeit currency operations linked with organized criminal groups attract stricter treatment.
Facts:
The accused were part of an organized network distributing fake currency smuggled from across the border.
Held:
The court imposed severe penalties, noting that:
Counterfeit currency destabilizes the economy
It often funds illegal or terror activities
Thus, punishment must deter such crimes.
Case 10: State of Kerala v. K. Damodaran
Principle: Possession of counterfeit currency in significant quantities shifts the burden to the accused to explain possession.
Facts:
The accused had large stacks of high-quality counterfeit notes.
Held:
Court held that when quantity is large:
It implies intent to circulate
Mere possession itself becomes incriminating
The accused failed to offer a satisfactory explanation and was convicted.
CONCLUSION
Counterfeiting of goods and currency harms:
Consumer trust
Government revenue
National security
International trade relations
Courts consistently hold that:
Deceptive similarity is enough for counterfeit goods liability.
Knowledge + possession or circulation is essential for counterfeit currency charges.
Organized counterfeiting attracts severe punishment.
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