Section 9 in The Coinage Act, 2011
Title: 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.
Title: 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.
Title: 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The Mint may in writing authorise any other organisation of the Government to melt withdrawn coins or take any help of such organisation for the said purpose.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.
Title: Prohibition of making or melting or destruction of coins
(1) No person shall—
(i) use any metal piece as coin whether stamped or unstamped, intended to be used as money except by the authority of the Government, or
(ii) melt or destroy any coin, or
(iii) use coin other than as a medium of exchange, or
(iv) have in his possession, custody or control,--
(a) any melted coin, whether in the molten state or in a solid state, or
(b) any coin in a destroyed or mutilated state, or
(c) coins substantially in excess of his reasonable requirements for the purpose of selling such coins for value other than their face value or for melting or for destroying or for disposing these coins other than as a medium of exchange.
Explanation.--For the purposes of determining the reasonable requirements of coins of a person, due regard shall be had to—
(i) his total daily requirements of coins;
(ii) the nature of his business, occupation or profession;
(iii) the mode of his acquisition of coins; and
(iv) the manner in which, and the place at which, such coins are being possessed, held or controlled by him.
(2) Whoever is found to be in possession of any metal or material which contains alloys in the same proportions in which they have been used in the manufacture of any coin shall be presumed, until the contrary is proved, to have contravened the provisions of sub-section (1).
(3) Nothing in this section shall apply—
(i) to any person who is found in possession of any metal or scraps or scissel, etc., of nonrecyclable coinage metal, which he may so possess as a result of valid disposal by auctions by a Mint;
(ii) to the Mint, Reserve Bank of India and its authorised agents, and suppliers of coins or coin blanks to the extent of orders placed by or under the authority of the Government until their supply or completion of orders placed by the Government;
(iii) to any prospective supplier who intends to supply coin or coin blanks as samples against a valid tender documents purchased by him provided that quantity is in reasonable agreement with quantity of samples to be supplied.
Title: Penalty for contravention of section 12
Whoever contravenes any provisions of section 12 shall be punishable with imprisonment which may extend to seven years and with fine.