The Coinage Act, 2011 is an Act that consolidates laws regarding coinage and the Mints. It was enacted for protection of coinage and to prohibit the melting or destruction of coins and also to prohibit the making or possession for issue. This Act extends to the whole of India. It has 6 chapters and 28 sections. It came into force on 1st September, 2011.
The Act defines ‘coin’ as any coin which is made of a metal or any substance approved by the central government or by any authority empowered by the government to issue coins, and which is a legal tender including commemorative coin and Government of India one rupee coin. Credit cards, debit cards, postal order and e-money issued by any bank, post office and or financial institution are not included as coins.
The Government has the sole right to establish and abolish Mints in places that it deems fit. It may also authorise the Government of a foreign county for minting and then import them into the country. A Mint is the Security Printing and Minting Corporation of India, or any other administration established for the purpose of minting (stamping of metal to make a coin). The coins should not be of a denomination higher than one thousand rupees and should be of the metals or mixed metals prescribed by the government. The remedy of making these coins and their standard weight shall be as recommended by the Government from time to time.
In case of a coin of denomination not less than one rupee, or a sum not exceeding one thousand rupee; or for a half rupee coin for a sum not exceeding ten rupees; or for any other coin for a sum not exceeding one rupee, the coin shall be a legal tender in payment or on account. But this is only if the coin has neither lost weight nor been defaced and thus is not of the weight that has been prescribed.
Prior to the commencement of the Indian Coinage (Amendment) Act, 1964, the Government notified the new coins in the naya paisa series. These shall continue to be legal tender in payment or account, if they are, a half rupee coin of a sum equal to or lesser than ten rupees, or any other coin not lesser than or equal to one rupee. The rupee should be divided into one hundred units. The Government, by notification, shall designate any name that it deems fit for any unit of its choice.
Chapter IV (Sections 9, 10 and 11) of this Act deals with diminished, defaced and counterfeit coins. Under Section 9, if a coin that is minted by a Government authorised organization is doubted as being diminished in weight or defaced and is thus below standard weight by a particular person, then that very person should break the coin. Section 10 states that a coin which has been issued or minted by a Government authorised organization, and is suspected by a person as being a counterfeit coin, then that coin shall be cut or broken, and he shall bear the losses. Lastly, Section 11 states that a mint may authorise other organisations, like, Government industrial unit or a public sector undertaking which possesses melting facilities, to melt withdrawn coins.
The punishment for different offenses under this Act varies, but the maximum punishment that an offender can be given is 7 years imprisonment and fine. The offences under this Act shall be cognizable and bailable but not compoundable.
Schedule VII of the Constitution of India contains the three lists. Currency, coinage and legal tender comes under the Union List. Items that come under the Union List are under the sole control of the Central Government.
The Coinage Act has been followed in the United States of America and the United Kingdom ever since 1792 and 1870 respectively. It deals with the legislation related to Coinage. Even in India, the Coinage Act has existed from 1906 and was named the Indian Coinage Act of 1906. But subsequently, by an amendment of Reserve Bank of India Act, 1934, the words ‘Indian Coinage Act, 1906’ was substituted with the ‘Coinage Act, 2011’.