If you are found to posses fake currency notes, and you cannot explain where you got them from, you can even go to jail. Most people do not want to deal with this problem in a legal way because our law enforcement (police) and legal system (courts) are not so easy to deal with. Unlikemost developed countries where a common person feels free to report even a smallest problem to the police, in India it is quite different as most people avoid contacting police because those investigations can be painfully inconvenient and especially because many people in law enforcement are not exactly honest. The legal system is even more troublesome, even a small court case in India can easily drag for months and years.
Therefore more and more people have juststarted to live as is. It is not possible check each and every currency note you receive in a bundle. Most people just pass it along to others, if someone objects you just give different note. Infact most people in India do not even know how to the things to check that differentiates a fake note from a real one.
Trying to pass on a currency note, knowingthat is a fake, is a punishable offence undersections 120-B, 420 and 489-A, B, C & D of the Indian Penal Code. Possession of counterfeit notes too is punishable with punishment as harsh as life imprisonment
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