The Coinage Act was enacted on March 2, 1906 with an objective to consolidate and modify the legal principles dealing with Coinage and Mint. The Act defines Mint as the existing mints and the mints yet to be created. The Act also explains the meaning of standard weight which means the approved weight for every coin. The term deface includes clipping, organizing, stamping or any other modification of the surface or figure of coins in a manner noticeable from the result of reasonable wear.
The Act empowers the Central government to constitute by notification in the Gazette of India, mint at such places where mint does not subsist during the commencement of the Act. The Central government shall also put an end to mint whether subsisting or yet to be constituted. The Indian Coinage (Amendment) Act, 1974 repealed the sections dealing with Silver coins and Standard Weight and fineness.
The coins not higher than the denominations of rupees one hundred shall, under the supervision and control of the Central Government be coined at the mints. The dimension, size, proportions and design, metals to be used, combination of metals etc. shall be decided by the Central Government by notifying in the Gazette of India. Moreover, the standard weight as prescribed for the coins of any value and the remedy permitted for the creation of such coins shall be determined by the Central Government.
The authority to direct coining, determination of size and designs, the sovereign’s denomination and the provisions dealing with the silver coins when considered as a legal tender are abolished by the Indian Coinage (Amendment) Act of 1947. Additionally, the coins delivered under the Act shall be considered as legal tender in payment of any sum or on account where the coin is of value not less than one rupee. Where the coin is a half rupee coin the sum shall be maximum of ten rupees to be a legal tender. If the coin is other than the two mentioned above, the sum shall not be above one rupee. But the coin shall not have lost the prescribed weight or not been defaced as provided under the Act.
The silver coins delivered after March 10, 1940 and before the enforcement of the amending Act of 1947 shall persist before considering it as a legal tender according to the rules provided under the Act. The newly created coins by the Economic Affairs Department under the Ministry of Finance in the series of naya paisa shall persist as legal tender, if such coins are created before the Amending Act of 1964 and after May 11, 1964. The Act also prescribes the value of the rupee and new coins which is designated by the Central Government and considered as a legal tender. Any coin of any value shall terminate to be a legal tender upon the notification issued by the Central government from the prescribed date.
If the silver coin which is created under the supervision and control of the Central Government is tendered to an authorized individual and such person supposes that the weight of the coin has been decreased below the standard weight or the coin has been defaced, the person can either by person or any other person can slash or break the coin. The procedure to be followed by the authorized persons to slash or break the coin is provided under the provisions of the Act.
The Indian Coinage Act, 1906 was further amended in 1985 through Indian Coinage (Amendment) Act. The amending Act inserted a new provision permitting the Central government to authorize for the import of coins that are under the control of such Government. Further, in 2011 the Central Government enacted Indian Coinage Act which received the assent of the President on September 1, 2011. The newly enacted legislation provided for penalty for the contravention of the provisions of the Act. The 2011 Act repealed many enactments including the Indian Coinage Act, 1906.