The accused allegedly tried to circulate the fake notes in a Dhaba near Shoghi, 15-km from here but the Dhaba owner got suspicious and informed the police.
The police laid a naka at Shoghi barrier and intercepted Daulat Ram and Harnek, hailing from Ferozpur in Punjab, and upon search currency notes worth Rs 1.4 lakh in the Rs 2,000 denomination were recovered from them.
After initial investigation, the police contacted the bank officials who found the notes fake and both of them were arrested.
The police have registered a case and investigations are on, he said.