Section 9 of The Coinage Act, 2011
- (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.
Summary
- If a coin made by the government is tendered (which means presented or handed over as payment) to an authorised person, they must inspect it.
- If the authorised person believes the coin has been diminished (which means reduced or made lighter) in weight by more than the allowed percentage set under Section 5, they must cut or break it.
- If the authorised person believes the coin has been defaced (which means damaged, clipped, filed, or altered on its surface in a way that is different from normal wear), they must also cut or break it.
- If the coin is cut or broken because it lost too much weight, the authorised person must receive the coin and pay the customer its full face value.
- If the coin is cut because it was fraudulently defaced (which means deliberately altered to cheat), the authorised person must return the pieces and the customer bears the loss.
- If the coin is cut because it was defaced but not fraudulently, the authorised person must accept the coin and pay the customer its full face value.
Practical examples
FAQ
1. Who has the authority to cut or break a diminished or defaced coin?
Any person authorised by the Central Government can cut or break the coin, either by themselves or through someone else.
2. What does "diminished in weight" mean under this section?
It means the coin's weight has fallen below its official standard weight by more than the allowed percentage (known as the remedy) set under Section 5.
3. What happens if a coin is cut because it lost too much weight?
The authorised person must receive the coin and pay the customer its full face value.
4. What happens if a coin is cut because it was fraudulently defaced?
The authorised person will return the cut pieces to the customer, and the customer must bear the financial loss.
5. What happens if a coin is defaced but there is no reason to believe it was done fraudulently?
The authorised person will cut the coin and pay the customer its full face value.
Test yourself
Q1.Under Section 9 of The Coinage Act, 2011, what must an authorised person do if they believe a coin has been defaced?
Q2.Under Section 9 of The Coinage Act, 2011, how does Section 5 affect the decision to cut a coin for weight loss?
Q3.Under Section 9 of The Coinage Act, 2011, what happens to a customer who presents a coin that has naturally lost weight below the legal limit?
Q4.Under Section 9 of The Coinage Act, 2011, what is the procedure if an authorised person believes a coin was defaced fraudulently?
Q5.Under Section 9 of The Coinage Act, 2011, if a coin is defaced but not fraudulently, how is the customer compensated?