Cheating

Section 415 of Indian Penal Code defines cheating.

Section 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”.

Hence, whoever, by deceiving any person:

  • Fraudulently or dishonestly induces the person so deceived
  1. To deliver any property, or
  2. to consent that any person shall retain any property, or
  • intentionally induces that person to do or omit to do something which he would not have done if not deceived and which act or omission causes or is likely to cause harm to that person in mind, body, reputation or property

is said to cheat.

Thus, section 415 has two alternate parts. In the first part, the accused must have fraudulently or dishonestly induced the person to deliver any property or consent to someone retaining that property. On the other hand, in the second part, the accused induces the person to do or omit to do something which he would not have done otherwise.

Essentials of cheating

The essentials ingredients which have to be proved to obtain conviction for cheating are-

First part: (a) deception (b) inducement (c) fraudulently or dishonestly (d) delivery or consent to retention of property

Second part: (a) deception (b) inducement (c) intentional inducement (d) person was induced to do or omit to do something (e) such act or omission caused or was likely to cause damage or harm to that person’s body, mind, reputation or property

Deception

Deceiving is to lead into error by making a person believe what is false or to disbelieve what is true. This deception may be express or implied and the fraudulent representation can be made directly or indirectly.

In Swami Dhirendra Brahmachari v Shailendar Bhushan[1], the accused, a Swami, was held guilty for cheating after he made false assertions that his yoga course was run by an ashram run by the Government, thereby inducing students to obtain admission and pay the fees.

What act is deception and what is not depends on the circumstances of each case but deception has been held to be the first stage of establishing the offence of cheating. Therefore, the element of deception must be present before the property is delivered and this element must be present at the time of making the representation.

Inducement

The effect of fraudulent or dishonest act must be such that it induces the person to deliver property or do something. Thus, inducement should be such that it leads to either delivery of property or doing an act or omission to do something.

In Shri Bhagwan Samaradha Sreepadha Vallabha Venkata Vishwanandha Maharaj v State of Andhra Pradesh[2], the accused falsely represented that through his touches and divine powers he could cure the complainant’s little girl of her congenital dumbness. The Supreme Court held that this false representation amounted to inducement.

Other important aspects of the offence of cheating

  1. Dishonest intention should be present at the time of making the promise

The inducement by the accused must have been made in the initial part of the transaction itself. The accused should have known that his representation was false and it must have been made with the intention of deceiving the other person.

It has been held in Hari Prasad Chamaria v Bhisun Kumar Surekha[3], that if subsequent to the transaction, one of the parties fails to honour their promises, it would only create a civil liability.

  1. Absence of intention of honouring the promise in the first place

It has to be shown that at the time the alleged false representation or promise was made, the accused had no intention of honouring the same.

  1. Dishonesty is causing either wrongful gain or wrongful loss

A person is said to do something dishonestly when he does so with the intention of causing wrongful gain or wrongful loss to another person. Wrongful gain is gain by unlawful means of property when the person is not legally entitled to the property. Wrongful loss is the loss by unlawful means of property when the person losing it is legally entitled to that property.

  1. False pretence can be inferred from the circumstances and need not be express
  1. Mens rea

Mens rea is one of the essential ingredients of the offence of cheating. Offence of cheating cannot be made out if there is no mens rea.  In Anil Kumar v State of Bihar[4], failure on the part of employees to perform their duties and follow rules laid down was not held to be cheating since there was no mens rea.

  1. Damage to body, mind, reputation or property caused or likely to be caused

The term ‘cause’ in section 415 implies a direct and proximate connection between the act or omission and the harm and damage to the victim. It doesn’t include damage occurring unconnected with the act induced by deceit. But it does cover all damages resulting or likely to result as a direct natural or probable consequence of the induced act. The damage should not be vague or remote and must be a natural consequence of the act.

Punishment for cheating

Section 417 and 420 lay down the punishment for cheating. Section 417 provides punishment for a simple case of cheating for a term extending to one year and/or fine.

Section 420 deals with cases of cheating, whereby, the deceived person is dishonestly induced:

  1. To deliver any property to any person
  2. To make, alter or destroy – i. the whole or any part of a valuable security, or
  3. Anything which is signed or sealed and which is capable of being turned into a valuable security.

An offender under section 420 becomes liable for a sentence of imprisonment for a term up to seven years with fine.

Cheating by personation

Section 416. Cheating by personation.—A person is said to “cheat by personation” if he cheats by pretending to be some other person, or by knowingly substituting one person for another, or representing that he or any other person is a person other than he or such other person really is.

Section 419. Punishment for cheating by personation.- Whoever cheats by personation shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.

Section 416 defines the offence while section 419 provides the punishment for it. Therefore, to convict someone under section 416 it is important to prove all elements of section 419. The person impersonated can be real or imaginary or unknown.

Cheating out of fiduciary relationship

  1. 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.

This section provides punishment for cheating by persons standing in fiduciary or financial capacity to the person cheated, as for example, the nature of relationship between a banker and a customer.


[1] (1995) Cr LJ 1810 (Del).

[2] AIR 1999 SC 2332

[3] AIR 1974 SC 301

[4] AIR 1974 SC 1560

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