Chapter XVII of the Indian Penal Code broadly covers the offences against property. Sections 415 to 420 under the said Chapter deal with the offences of cheating. Section 415 defines the offence of cheating and further provisions from sections 416 to 420 deal with particular aspects of cheating and punishment for the offence of cheating.
Cheating- [Sections 415 and 417]
Section 415 provides for the definition of cheating. The offence of cheating is constituted if the act consists of the following essentials-
1. Deception of any person
2. Fraudulently or dishonestly inducing the person so deceived to-
a. Deliver any property to any person, or
b. Consent that any person shall retain the property;
Intentionally inducing that person to do or omit to do anything by deceiving, and such act or omission causes or is likely to cause damage to that person in body, mind or reputation or property.
The word deceit as defined in the Black’s Law Dictionary means a fraudulent and cheating misrepresentation to prejudice the other and cause damage to the person. Therefore, the aspect of deceiving a person under section 415 necessarily includes fraudulent misrepresentation to cause damage to the victim. The English Courts have held that the deception in cases of cheating must include wilful misrepresentation of a definite fact with an intent to defraud[i].
The Calcutta High Court observed that it is not sufficient to prove that a false representation is made, it is also necessary to establish that the representation was false to the knowledge of the accused and the intention was to deceive the complainant[ii].
In the case of National Insurance Co. v. Narendra Kumar Jhanjari[iii] the Patna High Court following the judgment of the Supreme Court in State of Kerala v. S. A. Pareed Pillai[iv], 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[v].
In the case of Radhakrishna Dalmia v. Narayan[vi], 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.
Further, the explanation provided to the section 415 describes that a dishonest concealment of facts is considered as deception within the definition of cheating as provided for under section 415.
Section 417 prescribes punishment for the offence of cheating which is defined under section 415. The punishment imposed under section 417 is imprisonment of a term which may extend to one year or fine or both.
Cheating by personation- [Sections 416 and 419]
Section 416 provides for a specific form of cheating. It defines the offence of cheating by personation, which connotes that the offence of cheating is committed by a person who has pretended to be some other person or has knowingly substituted some other person. Further, the explanation to the section provides that the person who is being personated by the accused can be either a real person or an imaginary person.
The provision under section 416 requires the following essentials-
1. Pretending to be some other person by the accused
2. The accused has knowingly substituted some other person
3. The accused has represented some other person who is not the accused in reality.
The Madras High Court held that where a person by personating another person collected the hall-ticket from the University and wrote the exam on behalf of the latter, the former is guilty of an offence under section 416[vii].
Section 419 prescribes punishment for the offence of cheating by personation as defined under section 417. The punishment so imposed is imprisonment which may extend to a term of three years or fine or both.
Cheating by the person who is bound to protect the interest of the complainant- [Section 418]
Section 418 defines the offence of cheating when committed by specified persons and also prescribes punishment in those peculiar cases of cheating. Section 418 shall apply only if the following essentials are satisfied-
1. Cheating is committed with the knowledge of causing wrongful loss
2. Such wrongful loss is committed against a person whose interest in the transaction was to be protected by the accused.
3. The accused was bound to protect the interest of the complainant by law or by a legal contract.
Therefore, this provision can be applied in the cases where the accused is in the capacity of protecting the interests of the complainant in the transaction which has caused wrongful loss to the complainant owing to the cheating of the accused. In a case where the manager, directors and accountant have dishonestly produced the balance sheet which was materially false before the shareholders in order to obtain wrongful gain for themselves, such manager, directors and accountant were held liable for cheating under section 418.[viii]
Further, the provision also imposes a punishment of imprisonment which may extend to the term of three years or fine or both, to the convict under section 418.
The provision under section 420 considers cheating of more serious nature than the offence of cheating as provided for under section 415. Hence, section 420 applies if the following essentials are fulfilled-
1. There must be an offence of cheating
2. Cheating is accompanied with dishonest inducement of delivery of property or destruction or alteration of whole or part, of the valuable security or of the property which is signed and sealed or of the property which is capable of being converted into a valuable security.
Further, 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. Rajesh[ix], 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.
Frequently asked questions-
Is the offence of cheating under section 420 compoundable?
The offence of cheating under section 420 is compoundable by the person cheated with the permission of the court. But the offence is cognizable and non-bailable.
Edited by Sakshi Agarwal
Approved & Published – Sakshi Raje
[i] Goss, (1860) 8 Cox 262.
[ii]MatilalChakrabarti, (1950) 2 Cal 73.
[iii] 1990 Cr LJ 773 (Pat)
[iv] AIR 1973 SC 326
[v] State of Kerala v. A. P. Pillai, AIR 1973 SC 326
[vi] 1989 Cr LJ 443(MP)
[vii]Appasami, (1889) 12 Mad 151
[viii] S. Shankaramani v. NibarRanjanParida, 1991 Cr LJ 65(Orissa)
[ix] 1991 Cr LJ 487(Bom).