Are there any state-level rules that affect transporting currency notes?
Currency is a Central subject under the Indian Constitution — Schedule 7, Union List Entry 36 — so state governments cannot legislate on currency itself. States cannot impose their own limits on how much currency a person may carry or declare additional restrictions on numismatic collecting beyond central law. However, certain state-level enforcement frameworks — particularly around election surveillance, anti-hoarding drives, and police checkpoint practices — create practical friction for collectors transporting currency across state boundaries. The Malani case (2026) arose precisely from state police action at an election surveillance checkpoint.
Constitutional position — currency is a Union subject
The Constitution of India allocates legislative power over currency to Parliament through Schedule 7, Union List Entry 36: 'Currency, coinage and legal tender; foreign exchange.' State governments have no power to legislate on currency — they cannot impose additional holding limits, cannot create new offences related to currency possession, and cannot restrict the movement of currency beyond what central law provides.
This constitutional position means that a collector crossing a state border with their numismatic collection is governed exclusively by central law — the RBI Act, the FEMA, the Specified Banknotes Act (for demonetised notes), the Income Tax Act, and the BNSS. No state can impose additional restrictions or declaration requirements for currency movement between states within India.
Practical friction — police checkpoints during elections and special situations
While states cannot legislate on currency, state police enforcement actions — particularly around elections — create real practical friction. During elections, the Election Commission of India directs enforcement agencies to monitor unusual cash movements to prevent the use of unaccounted money to influence voters. State police and the Income Tax Department's Flying Squads operate checkpoints on major roads to stop vehicles and check cash.
A collector travelling on a state highway to a numismatic fair during an election period with a collection of notes may be stopped at such a checkpoint. The Malani case illustrates exactly this scenario: Girish Malani was stopped at a routine election surveillance checkpoint in Maharashtra. His ₹2 lakh in demonetised notes was seized. The seizure itself was legally authorised under the election enforcement framework — but the consequences of the seizure (missing the exchange deadline) were found to be unfair.
State border checkpoints — commercial vehicles and personal vehicles
State border checkpoints for commercial vehicles focus on interstate trade and tax compliance — checking goods vehicles for proper documentation. Private vehicles are typically waved through without inspection unless there is a specific reason for stopping. A private car carrying a numismatic collection on personal travel is unlikely to be stopped at a state border checkpoint in normal circumstances.
If stopped: be cooperative, present identification when asked, and if questioned about the collection, describe it as a numismatic hobby collection. Do not volunteer information beyond what is asked. If notes are seized, insist on a proper panchnama before the officer departs.
State Treasure Trove Acts — for coins found in the ground
Some states have their own Treasure Trove Acts or implement the central framework differently. If a collector finds coins during construction or land development — coins embedded in the ground rather than circulating notes — state treasure trove law may require reporting to local authorities. A collection of coins purchased in the market is not subject to treasure trove law — only items actually found in the ground. The distinction between 'found' and 'purchased' is the key threshold.
Laws & authorities referenced in this chapter
Constitution of India — Schedule 7, Union List Entry 36 (currency — central subject; states cannot legislate)
Representation of the People Act 1951 — election enforcement; cash surveillance during elections
BNSS 2023 — §106 (police seizure powers; panchnama requirement)
State Treasure Trove Acts (vary by state) — apply to items found in ground, not purchased collections
Girish Rameshchandra Malani v. UoI & RBI — Nagpur Bench, Bombay HC, 2026 — election checkpoint seizure and its consequences
Currency is a Union List subject — states cannot legislate additional restrictions on currency carrying or possession. Election enforcement creates practical friction: state police and IT Flying Squads operate checkpoints to monitor cash during elections (Malani 2026 arose from exactly this). State border checkpoints: private vehicles not typically stopped. If stopped: cooperate, describe collection accurately, insist on panchnama if anything is seized. Treasure trove: applies only to coins found in the ground, not purchased collections.
This is educational content, not legal advice. For a specific situation, please consult a qualified legal professional. Excerpted from Currency, Coins & The Law by Mayank Agarwal, Part 7: Physical Movement — Couriers, Travel & Seizure.