Law relating to coinage and the Mints in India, the protection of coinage and to provide for the prohibition of melting or destruction of coins and prohibit the making or the possession thereof for issue.
Coinage Act, 2011
[Act 11 of 2011] [1st September, 2011]
An Act to consolidate the laws relating to coinage and the Mints, the protection of coinage and to provide for the prohibition of melting or destruction of coins and prohibit the making or the possession thereof for issue and for matters connected therewith or incidental thereto
Be it enacted by Parliament in the Sixty-second Year of the Republic of India as follows—
Statement of Objects and Reasons.—The Coinage Act, 1906 provides for applicability, denomination, dimension, design and composition of coins, standard weight of coins and the limit up to which the coin is a legal tender. It empowers the Central Government to establish and abolish Mints and to call in coins and also power to certain persons to cut diminished or counterfeit or defaced coins and also provides for the procedure in regard to cut coins or coins liable to be cut. The Act also includes saving provision for making of other coins for issue as money by the Government of other territory beyond the limits of India. It also includes a temporary provision with respect to certain Hyderabad coins which should be continued as a legal tender in that State as it used to be before the commencement of this Act.
| Other Contents of Coinage Act, 2011 |
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| Sections 1 to 11 Sections 12 to 28 |
In order to take care of acute shortage of small coins in the country, the Small Coins (Offences) Act, 1971 was enacted to take steps to avoid such shortages in the interest of the general public. It provides for prevention of melting or destruction of small coins or hoarding of small coins for the purpose of melting and destruction and provides punishment for melting and destruction of coins.
In order to prohibit the making or the possession for issue or the issue by private person of pieces of metal for use as money, the Metal Tokens Act, 1889 was enacted to prohibit the Railways administration and the local authorities to receive or introduce any piece of metal token as money. It provides for penalty for unlawful making, issue or possession of such metal token. It empowers the Central Government to restrict the import of such piece of metals as may be used as money. Further, the Bronze Coin (Legal Tender) Act, 1918 was enacted to provide that where bronze coins of any of the denominations specified in Section 8 of the Coinage Act, 1906 are coined outside Part A and Part B States at the request of the Central Government and if it is satisfied that such coins are in accordance with the requirements of Section 9 and of any notification for the time being in force under Section 10, it may, by notification in the Official Gazette, direct the issue of any such coins, and thereafter any such coins shall be legal tender in payment or on account in the same way and to the same extent as if they were coins referred to in Section 10, and the provisions shall apply accordingly.
2. The Then Minister of Finance, in the Budget Speech of 1993, announced setting up of a special review group in every Ministry or Department to review the existing laws and procedures and identify changes needed in the light of the new policies. The Group constituted in the Department of Economic Affairs and subsequently another Expert Group constituted by the Cabinet Secretariat in 1997, and thereafter, a Commission constituted to review administrative laws in 1998 recommended the amalgamation of the Coinage Act, 1906, the Metal Tokens Act, 1889 and the Small Coins (Offences) Act, 1971 in one comprehensive Act. The Law Commission in its 159th Report on Repeal and Amendments of Laws had also recommended for consolidation of the above Acts. Later on, it was felt that the Bronze Coin (Legal Tender) Act, 1918 may also be repealed, having become obsolete as bronze coins have been removed from circulation many years back.
3. In the meantime, the management of all the India Government Mints was transferred to a Corporation, namely, the Security Printing and Minting Corporation of India Limited which was formed in 2006 after consideration and approval of the Cabinet in its meeting held on 23-8-2005 to reorganise Mints as per their operational requirements and this development has been factored in while preparing the Coinage Bill, 2009.
4. The salient features of the Bill, inter alia, are as follows—
(i) it provides for amalgamation of four Acts, namely, the Metal Tokens Act, 1889, the Coinage Act, 1906, the Bronze Coin (Legal Tender) Act, 1918 and the Small Coins (Offences) Act, 1971 into one Act;
(ii) it provides for punishment with imprisonment which may extend to seven years and with fine if a person is found to be making or melting or destructing the coins and for deletion of the provisions of abovementioned four Acts which have since become redundant;
(iii) it repeals the four aforesaid Acts which have since become obsolete.
5. The Bill seeks to achieve the above objectives.
Chapter I
PRELIMINARY
1. Short title, extent and commencement.
1. Short title, extent and commencement.—(1) This Act may be called the Coinage Act, 2011.
(2) It extends to the whole of India.
(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
2. Definitions.
2. Definitions.—In this Act, unless the context otherwise requires,—
(a) “coin” means any coin which is made of any metal or any other material stamped by the Government or any other authority empowered by the Government in this behalf and which is a legal tender including commemorative coin and Government of India one rupee note.
Explanation.—For the removal of doubts, it is hereby clarified that a “coin” does not include the credit card, debit card, postal order and e-money issued by any bank, post office or financial institution;
(b) “commemorative coin” means any coin stamped by the Government or any other authority empowered by the Government in this behalf to commemorate any specific occasion or event and expressed in Indian currency;
(c) “deface” means any type of clipping, filing, stamping, or such other alteration of the surface or shape of a coin as is readily distinguishable from the effects of reasonable wear;
(d) “Government” means the Central Government;
(e) “issue” means to put a coin into circulation for use as money;
(f) “metal” means any metal, base metal, alloy, gold, silver or any other material which may be prescribed by the Government for the purpose of any coin;
(g) “Mint” means the Security Printing and Minting Corporation of India Limited formed and incorporated under the Companies Act, 1956 (1 of 1956) or any other organisation established by or under the authority of the Government to make a coin by stamping metal;
(h) “notification” means notification published in the Official Gazette;
(i) “per cent” means the percentage of metals prescribed for any coin;
(j) “prescribed” means prescribed by rules made under this Act;
(k) “remedy” means variation from the standard weight and fineness;
(l) “standard weight” means the weight prescribed for any coin.
Chapter II
ESTABLISHMENT OF MINTS
3. Power to establish and abolish Mints.
3. Power to establish and abolish Mints.—The Government may, by notification,—
(a) establish a Mint at any place which may be managed by it or by any other person, which may be authorised for this purpose:
Provided that the Mints established before the commencement of this Act shall be deemed to have been established by the Government under this section:
Provided further that where the Government is of the opinion that it is necessary or expedient in the public interest so to do, it may authorise the minting of coins by any organisation or Government of any foreign country, within or beyond the limits of India and acquire such coins either by way of import or otherwise for issue under its authority;
(b) abolish any Mint.
Chapter III
COINAGE
4. Denominations, dimensions, designs and composition of coins.
4. Denominations, dimensions, designs and composition of coins.—Coins may be minted at the Mints or at any other place authorised under the proviso to Section 3 of such denominations not higher than one thousand rupees and of such dimensions and designs and containing such metals or mixed metals of such composition or any other material as may be prescribed by the Government.
5. Standard weight and remedy.
5. Standard weight and remedy.—The standard weight of the coin of any denomination, minted under the provisions of Section 4, and the remedy allowed in making of such coins, shall be such as may be prescribed in this behalf by the Government from time to time.
6. Coin when a legal tender.
6. Coin when a legal tender.—(1) The coins issued under the authority of Section 4 shall be a legal tender in payment or on account, in case of—
(a) a coin of any denomination not lower than one rupee, for any sum not exceeding one thousand rupees;
(b) a half-rupee coin, for any sum not exceeding ten rupees;
(c) any other coin, for any sum not exceeding one rupee:
Provided that the coin has not been defaced and has not lost weight so as to be less than such weight as may be prescribed in its case.
(2) All new coins in the naya paisa series, designated as such under the notification of the Government of India in the Ministry of Finance, Department of Economic Affairs, Number S.R.O. 1120, dated the 11th May, 1956, issued prior to the commencement of the Indian Coinage (Amendment) Act, 1964 (17 of 1964), shall continue to be a legal tender in payment or on account, in case of,—
(a) a half-rupee or fifty naye paise coin, for any sum not exceeding ten rupees;
(b) any other coin, for any sum not exceeding one rupee.
7. Decimal system of coinage.
7. Decimal system of coinage.—(1) The rupee shall be divided into one hundred units and any such unit may be designated by the Government, by notification, under such name as it thinks fit.
(2) All references in any enactment or in any notification, rule or order under any enactment or in any contract, deed or other instrument to any value expressed in annas, paisa and pies shall be construed as references to that value expressed in units referred to in sub-section (1) converted thereto at the rate of sixteen anna, sixty-four paise or one hundred and ninety-two pies to one hundred units referred to in sub-section (1).
(3) All references in any enactment or in any notification, rule or order under any enactment or in any contract, deed or other instrument to any value in naya paisa or naye paise shall be construed as references to that value expressed respectively in units referred to in sub-section (1).
8. Power to call in coin.
8. Power to call in coin.—Notwithstanding anything contained in Section 6, the Government may, by notification, call in with effect from such date as may be specified in the notification, any coin, of whatever date or denomination and on and from the date so specified, such coin shall cease to be a legal tender, save to such extent as may be specified in the notification.
Chapter IV
DIMINISHED, DEFACED AND COUNTERFEIT COINS
9. Power to certain persons to cut, diminished or defaced coins.
9. Power to certain persons to cut, diminished or defaced coins.—(1) Where any coin which has been minted and issued by or under the authority of the Government is tendered to any person authorised by it to act under this section, and such person has reason to believe that the coin—
(a) has been diminished in weight so as to be more than such per cent below standard weight as provided in Section 5; or
(b) has been defaced, he shall, by himself or through another person, cut or break the coin.
(2) A person cutting or breaking coin under the provisions of clause (a) of sub-section (1) shall receive and pay for the coin at its face value.
(3) A person cutting or breaking coin under the provisions of clause (b) of sub-section (1) shall observe the following procedure, namely—
(a) if such person has reason to believe, that the coin has been fraudulently defaced, he shall return the pieces to the person tendering the coin, who shall bear the loss caused by such cutting or breaking;
(b) if such person has reason to believe, that the coin has not been fraudulently defaced, he shall receive and pay for the coin at its face value.
10. Power to certain persons to cut counterfeit coins.
10. Power to certain persons to cut counterfeit coins.—Where any coin minted or issued by or under the authority of the Government is tendered to any person authorised by the Government under Section 9 and such person has reason to believe that the coin is counterfeit, he shall by himself or through another person cut or break the coin, and the tenderer shall bear the loss caused by such cutting or breaking.
11. Power of Mint to delegate its functions.
11. Power of Mint to delegate its functions.—The Mint may in writing authorise any other organisation of the Government to melt withdrawn coins or take any help of such organisation for the said purpose.
Explanation.—For the purposes of this section “organisation” means any Government industrial unit or public sector undertaking possessing melting facilities.
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