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I hereby declare that the project entitled “Offence of Cheating under the IPC” submitted by me
at CHANAKYA NATIONAL LAW UNIVERSITY is a record of bona fide project work
carried out by me under the guidance of our mentor MS. PREETY ANAND. I further declare
that the work reported in this project has not been submitted and will not be submitted, either
in part or in full, for the award of any other degree or diploma in this university or in any other
university.
DIKSHA RAJ
ROLL-2118
ACKNOWLEDGEMENT
It is a fact that any research work prepared, compiled or formulated in isolation is inexplicable
to an extent. This research work, although prepared by me, is a culmination of efforts of a lot
of people who remained in veil, who gave their intense support and helped me in the
completion of this project.
Firstly, I am very grateful to my subject teacher MS. PREETY ANAND, without the kind
support and help of whom the completion of this project was a herculean task for me. She
donated her valuable time from her busy schedule to help me to complete this project. I would
like to thank him for her valuable suggestions towards the making of this project.
I am highly indebted to my parents and friends for their kind co-operation and encouragement
which helped me in completion of this project. I am also thankful to the library staff of my
college which assisted me in acquiring the sources necessary for the compilation of my project.
Last but not the least; I would like to thank the Almighty who kept me mentally strong and in
good health to concentrate on my project and to complete it in time.
I thank all of them !
DIKSHA RAJ
ROLL-2118
B.A.LL.B. (HONS.) 2YEAR
SESSION: 2019-2024
TABLE OF CONTENT
Contents
DECLARATION................................................................................................................................ 2
ACKNOWLEDGEMENT.................................................................................................................... 3
TABLE OF CONTENT ....................................................................................................................... 4
INTRODUCTION ............................................................................................................................. 5
415. Cheating. ............................................................................................................................... 5
ESSENTIAL INGREDIENTS OF CHEATING :- ...................................................................................... 7
416. Cheating by personation. ....................................................................................................... 8
417. Punishment for cheating. ....................................................................................................... 8
418. Cheating with knowledge that wrongful loss may ensue to person whose interest offender is
bound to protect. .......................................................................................................................... 9
419. Punishment for cheating by personation. ............................................................................... 9
420. Cheating and dishonestly inducing delivery of property. ........................................................ 9
KINDS OF CHEATING .................................................................................................................... 10
JUDICIAL INTERPRETATION ON CHEATING ...................................................................... 11
CONCLUSION ............................................................................................................................... 19
BIBLIOGRAPHY............................................................................................................................. 20
INTRODUCTION
As we see cheating is a criminal offence and it has myriad of crimes associated with it. It can
be seen in various forms. In the layman’s language cheating can be described as a dishonest or
unfair act done to gain advantage over the other. Cheating is saying or doing something
dishonesty which makes someone believe that something is true when it is not. It is a term we
often hear in our daily lives but don’t know its legal aspects. To make a more clear
understanding from legal point of view, this article would be dealing with cheating and its
constituents, punishment for this offence and other legal issues related to it. Further, this article
will also discuss the legal remedies available for this offence.
Cheating (Section415-420ofIPC)
Indian penal code deals with this offence under section 415 to 420.
415. Cheating.
Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived
to deliver any property to any person, or to consent that any person shall retain any property,
or intentionally induces the person so deceived to do or omit to do anything which he would
not do or omit if he were not so deceived, and which act or omission causes or is likely to cause
damage or harm to that person in body, mind, reputation or property, is said to “cheat“.
Explanation-
A dishonest concealment of facts is a deception within the meaning of this section.
Illustrations-
(a) A, by falsely pretending to be in the Civil Service, intentionally deceives Z, and thus
dishonestly induces Z to let him have on credit goods for which he does not mean to pay. A
cheats.
(b) A, by putting a counterfeit mark on an article, intentionally deceives Z into a belief that this
article was made by a certain celebrated manufacturer, and thus dishonestly induces Z to buy
and pay for the article. A cheats.
(d) A, by tendering in payment for an article a bill on a house with which A keeps on money,
and by which A expects that the bill will be dishonored, intentionally deceives Z, and thereby
dishonestly induces Z to deliver the article, intending not to pay for it. A cheats.
(e) A, by pledging as diamonds article which he knows are not diamonds, intentionally
deceives Z, and thereby dishonestly induces Z to lend money. A cheats.
(f) A intentionally deceives Z into a belief that A means to repay any money that Z may led to
him and thereby dishonestly induces Z to lend him money. A not intending to repay it. A cheats.
(g) A intentionally deceives Z into a belief that A means to deliver to Z a certain quantity of
indigo plant which he does not intend to deliver, and thereby dishonestly induces Z to advance
money upon the faith of such delivery. A cheats; but if A, at the time of obtaining the money,
intends to deliver the indigo plant, and afterwards breaks his contract and does not deliver it,
he does not cheat, but is liable only to a civil action for breach of contract.
(h) A intentionally deceives Z into a belief that A has performed A’s part of a contract made
with Z, which he has not performed, and thereby dishonestly induces Z to pay money. A cheats.
A sells and conveys an estate to B. A, knowing that in consequence of such sale he has no right
to the property, sells or mortgages the same to Z, without disclosing the fact of the previous
sale and conveyance to B, and receives the purchase or mortgage money for Z. A cheats. 1
1
THE INDIAN PENAL CODE, 1860, UNIVERSAL PUBLICATION
first stage of cheating. So, it can be said that if the deception is not proved then it becomes hard
for the prosecution to prove the offence of cheating
INDUCEMENT
The second essential ingredient of cheating can be said as inducement which leads to either
delivery of the property or any act or omission. Mere deceit is not enough to prove the offence
of guilt but also its effect on the person is also to be take care of. Similarly, just fading or doing
something dishonestly does not in itself suffice the offence but also the its after effects must
be seen while framing the charges.
Explanation-
The offence is committed whether the individual personated is a real or imaginary person.
Illustration-
(a) A cheats by pretending to be a certain rich banker of the same name. A cheats by
personation.
(b) A cheats by pretending to be B, a person who is deceased. A cheats by personation.
CLASSIFICATION OF OFFENCE
Punishment—Imprisonment for 1 year, or fine, or both—Non-cognizable— Bailable—Triable
by any Magistrate—Compoundable by the person cheated with the permission of the court.
418. Cheating with knowledge that wrongful
loss may ensue to person whose interest
offender is bound to protect.
Whoever cheats with the knowledge that he is likely thereby to cause wrongful loss to a person
whose interest in the transaction to which the cheating relates, he was bound, either by law, or
by a legal contract, to protect, shall be punished with imprisonment of either description for a
term which may extend to three years, or with fine, or with both.
CLASSIFICATION OF OFFENCE
Punishment—Imprisonment for 3 years, or fine, or both—Non-cognizable— Bailable—
Triable by any Magistrate—Compoundable by the person cheated with the permission of the
court.
CLASSIFICATION OF OFFENCE
Punishment—Imprisonment for 3 years, or fine, or both—Cognizable—Bailable— Triable by
any Magistrate—Compoundable by the person cheated with the permission of the court.
CLASSIFICATION OF OFFENCE
Punishment—Imprisonment for 7 years and fine—Cognizable—Non-bailable— Triable by
Magistrate of the first class—Compoundable by the person cheated with the permission of the
court.
The provision also imposes punishment for the offence under section 420. The punishment is
imprisonment for a term which may extend to seven years and the convict is also liable to fine.
Therefore, considering the severity of the punishment prescribed under section 417 and section
420, the Court in the case of Anilchandra Pitambardas v. Rajesh3, held that where there is
delivery of any property or destruction of any valuable security, section 420 is the proper
section to apply and not section 417.
KINDS OF CHEATING
Cheating can be done by various ways. Some of them are given here:-
Misrepresentation as to caste- An offence of cheating is deemed to be done if a person is
represented as a person of some other caste then the caste to which that person belongs actually.
Making false entries in book of accounts: - If some person make some false entries in books
of accounts of some other person or himself to give effect to any debt or its repayment then it
would amount to offence of cheating.
Attempt to create false evidence: - If accused gives false evidence regarding some event then
he can be held guilt of the offence of cheating as it is taken as to induce the court to believe
that event.
Showing false professional qualifications: - If some person gives some false representation
with regard to any professional qualification which he actually does not poses the amounts to
cheating. 4
2
THE INDIAN PENAL CODE, 1860, UNIVERSAL PUBLICATION
3
Anilchandra Pitambardas v. Rajesh , 1991 Cr LJ 487(Bom).
4
K.D. Gaur, The Textbook on The Indian Penal Code, 3rd Edition, Reprint, 2007, Universal Law
Publishing Co. Pvt. Ltd.
JUDICIAL INTERPRETATION ON CHEATING
5
www.indiankanoon.com
last Week of April, 1976, S/Shri Bhola Nath Arora and Raman Arora , who described
themselves as partners of M/s. B. D. Raman Arora, Varanasi, contacted them through Mr.
Seth at their Head Office at 54, Janpath. New Delhi and expressed a desire to lift the unsold
liquor of various brands lying with them at Kanpur. Since the financial position of the Bhola
Nath Arora was not known to them, they were reluctant to agree to the said proposition except
against payment in cash. However, the Bhola Nath Arora and others represented that they were
men of lakhs and would make part payment by means of bank draft and the balance by
installments through post-dated cheques to be issued by them. Since the unsold quantity as on
30th April, 1976 could be sold to a wholesale dealer in Uttar Pradesh only, necessary
permission was obtained by the Bhagat industries from the Excise Department, Kanpur, on 7th
May, 1976 and the Bhola Nath Arora and others took delivery of the goods covered under
invoice Nos. 1560, 1561 & 1562, all of even date of 9th May, 1976. They assured Mr. Seth
that payment would be made and thus they induced Mr. Seth to accept part payment by bank
draft and balance payment by post-dated cheques and to effect delivery.
The total value of the goods thus delivered to the petitioners on 9th May, 1976, came to
Rs.1,44,252/36 p. out of which a sum of Rs. 27,000/- was paid by the petitioners by means of
a demand draft and for the balance amount four cheques dated 5th June, 1976, dated 24th June,
1976, 19th July, 1976 and 14th August 1976, in the sums of Rs. 29,313/36, Rs. 29,313/-,
Rs.29,313/- and Rs. 29,313/- respectively were delivered by them to Mr. Seth. The said
cheques were presented on the due dates to the Bankers of the Bhola Nath Arora and others
but wrongful loss to them and wrongful gain to themselves they did all this. The Bhagat
corporations asserted that the conduct of the Bhola Nath Arora and others proved their
dishonest and fraudulent intention from the very beginning and even when they were contacted
personally they told them that they had succeeded in obtaining the goods worth Rs. 1,44,252/36
P. for just Rs. 27,000/-.
Proceedings in the lower court.
After entering appearance the Bhola Nath Arora and others moved an application purported to
be under S. 239/294 of the Code, contending that the subject matter of the challan was just a
business transaction between the parties and at best it gave rise to civil liability. They also
sought permission to produce certain documents in order to demolish the allegations of the
prosecution : in regard to the ingredients of cheating. Further they expressed a desire to be
examined before framing of the charge and contended that the investigation agency has
manoeuvred and twisted the facts in order to usurp jurisdiction at Delhi for investigation even
though no part of the cause of action had arisen at Delhi and the goods were delivered as well
as received in the State of Uttar Pradesh.
Vide impugned order dated 4th August 1980, the learned Magistrate of the sessions court while
rejecting their aforesaid prayer found that the facts disclosed prima facie a case under S. 420,
I.P.C. and that the Court at Delhi had jurisdiction to try the same.
It was submitted that the Bhagat corporations would not have delivered the goods but for the
inducement that the delivery was being effected against post-dated cheques with the assurance
that the same would be honoured on presentation on due dates.
QUESTION RAISED
Main question in front of the court was that will dishonour of cheque would come under the
definition of cheating.Second question in which the court looked upon was the jurisdiction of
the court of Delhi to hear the matter as petitioner said that as place of transaction was so the
court has no jurisdiction.
In the case of National Insurance Co. v. Narendra Kumar Jhanjari 7 the Patna High Court
following the judgment of the Supreme Court in State of Kerala v. S. A. Pareed Pillai 8, held
that where a person was persuaded to subscribe for a policy and the insurer subsequently fails
to recover the amount on the happening of the event insured against, the dishonest interest
cannot be inferred and hence the insurer cannot be held liable for cheating.
The offence of cheating cannot be proved by establishing the deceit alone, though deception is
the essence of the offence. The aspect of the fraudulent or dishonest intention of the accused
should also be established. It is very important that the accused must have such culpable
intention right from the time of making promise 9.
In the case of Radhakrishna Dalmia v. Narayan10, the court held that the culpable intention
of the accused could be inferred where the payment of post-dated cheques was stopped by the
drawer. The court further refused to quash the proceedings as the fraudulent intention of the
accused was established.
6
Joseph v. Philip Joseph, AIR 2001 Ker. 300
7
National Insurance Co. v. Narendra Kumar Jhanjari ,1990 Cr LJ 773 (Pat)
8
Kerala v. S. A. Pareed Pillai ,AIR 1973 SC 326
9
State of Kerala v. A. P. Pillai, AIR 1973 SC 326
10
Radhakrishna Dalmia v. Narayan, 1989 Cr LJ 443(MP)
Contents of proposals were in the handwriting of accused.The trial Court punished the accused
under Sections 420. He appealed to the High Court. The High Court upheld the conviction. He
appealed to the Supreme Court contending that on the basis of the proposals the policies were
not issued and no loss occurred to LIC, and his acts should be treated as preparation. The
Supreme Court held that the accused was rightly convicted by the Courts below.11
11
Ram Prakash Singh vs. State of Bihar, 1998 (1) SCC 173
12
Abhayanand Mishra vs. State of Bihar , AIR 1961 SC 1698
13
Mobarik Ali Ahmed vs. the State of Bombay , 1957 AIR 857
year and then initiated criminal proceedings against the four directors of the appellant
company, i.e., Mobarik Ali, Santran, A.A. Rowji and S.A. Rowji. The last three accused
absconded. The appellant fled to England. The Indian Authorities made an application to the
Metropolitan Magistrate, Bow Street, London, who ordered the arrest of the appellant. He was
brought to Bombay and then was tried. The trial Court proceeded against the appellant and
found him guilty under Section 420, and imposed penalty and imprisonment for three years
and ten months. On appeal Bombay High Court confirmed the conviction. The appellant
appealed to the Supreme Court. 16 Judgment: The Supreme Court held: ―The appellant ceased
to be an Indian citizen and was a Pakistani national at the time of the commission of the offence,
he must be held guilty and punished under IPC notwithstanding he is not being corporeally
present in India at that time.
CONCLUSION
Cheating is an offence under IPC in which a person induces the other by deceiving the person
to do any act or to omit to do an act. The intention of the accused plays an important part and
is taken into consideration while deciding his liability. The two main elements that have to be
considered in order to constitute the offence is deception and inducement. The intention to
cheat on part of the accused at the time of making a false representation is needed to be proved.
It must be shown that a promise was made by the accused and he failed to keep the promise
and further, no effort was put in by him in order to keep the promise.
BIBLIOGRAPHY
1) The Indian Penal Code- RATANLAL &
DHIRAJLAL
2) https://legodesk.com/legopedia/section-415-of-
ipc
4) www.google.com
5) SAXENA, R.N., INDIAN PENAL CODE,
CENTRAL LAW PUBLICATION
6) www.indiankanoon.com