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The accused, Pavaratty native Justin, has allegedly used the notes he printed for six months.
Police suspect the notes might have been used by real estate players to dupe people by putting up a show of wealth.
According to Alappuzha South Police, the incident came into light when a person handed over seven fake notes that he got from Edathua Agriculture Officer M Jishamol to a bank.
Mithun Vishwambharan, 33, had been on the run after escaping from the police custody while being taken out in handcuff for evidence-collection.
Kunneparambu Thomas, originally of Athirampuzha in Kottayam district, was rearrested by a police team led by Crime Branch SP KM Sabu Mathew and DySP S Amminikuttan.
What the NIIST team has done is develop fluorescent material that would look white or off-white to the naked eye.
The fake currency manufacturing was allegedly carried out at the house rented by the culprits at Elanji village
Chairman of the defunct National TV group, Yunus Ansari faces trial for running an organised crime syndicate involved in smuggling of high quality Fake Indian Currency Notes.
The Sindh government has maintained that Mehran Paper Mill was shut after the sanctions under the Foreign Narcotics Kingpin Designation Act of the US in 2015.
For the first time, the FICN seized by Special Cell proves that 'Optical Variable Ink' used by India in printing Rs 2000 notes has also been used by the Pakistan operatives.