CENTRAL UNIVERSITY OF SOUTH BIHAR

TOPIC :- CHEATING ( SEC.417- 420)

Under the supervision of

Dr.pawan Mishra
Associate prof. of cusb

Submitted by :
Rajdeep dutta
Ballb 3rd sem
Cusb1713125037

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2
 DECLARATION

I , Rajdeep Dutta , hereby declare that , the project work entitled , ‘Cheating’ submitted
to School Of Law and Governance , CUSB, Gaya is record of an original work done by
me under the able guidance of Assistant Professor ‘Dr.P.K.Mishra’ Faculty of School Of
Law And Governance , CUSB, Gaya.

Rajdeep Dutta
CUSB17131250237

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 RESEARCH METHODOLOGY

The Objective of this project is to examine the cheating under Indian Penal Code. This project
is descriptive and analytical in nature. Secondary and Electronic resources have been largely
used to gather information and data about the topic.
Books and other reference as guided by Faculty of School of Law and Governance have been
primarily helpful in giving this project a firm structure. Websites, dictionaries and articles have
also been referred.
Footnotes have been provided wherever needed to acknowledge the source. Citation has also
been provided.

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 ACKNOWLEDGEMENT

The success and final outcome of this project required a lot of guidance and assistance
from many people and I am extremely privileged to have got this all along the completion of
my project. All that I have done is only due to such supervision and assistance and I would not
forget to thank them.

I respect and thank Dr.P.K.Mishra, for providing me an opportunity to do the project work on
the topic of Cheating and giving us all support and guidance which made me complete the
project duly. I am extremely thankful to him for providing such a nice support and guidance,
although he had a busy schedule

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 CONTENTS

1) Declaration…………………………………………………………………………1
2) Research Methodology…………………………………………………………..2
3) Acknowledgements………………………………………………………………3
4) Tables of cases……………………………………………………………...4
5) Chapter-I
A. Introduction……..………………………………………………………6-7
6) History …………………………………………..8-9
7) Essentials of Cheating…………………………10
8) Modes of Cheating………………………11
9) Case Laws………………………………………...................................12-13
10) Conclusion……...…………………………………………………………………14
11) End Notes….……………………………………………………………………….15

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 Introduction

The Indian Penal Code (IPC) is the main criminal code of India. It is a comprehensive code
intended to cover all substantive aspects of criminal law. The code was drafted in 1860 on the
recommendations of first law commission of India established in 1834 under the Charter Act
of 1833 under the Chairmanship of Thomas Babington Macaulay. It came into force in British
India during the early British Raj period in 1862. However, it did not apply automatically in
the Princely states, which had their own courts and legal systems until the 1940s. The Code has
since been amended several times and is now supplemented by other criminal provisions.
After the partition of the British Indian Empire, the Indian Penal Code was inherited by its
successor states, the Dominion of India and the Dominion of Pakistan, where it continues
independently as the Pakistan Penal Code. The Ranbir Penal Code (RPC) applicable in Jammu
and Kashmir is also based on this Code. After the separation of Bangladesh from Pakistan, the
code continued in force there. The Code was also adopted by the British colonial authorities in
Colonial Burma, Ceylon (modern Sri Lanka), the Straits Settlements (now part of Malaysia),
Singapore and Brunei, and remains the basis of the criminal codes in those countries.

History
The draft of the Indian Penal Code was prepared by the First Law Commission, chaired by
Thomas Babington Macaulay in 1834 and was submitted to Governor-General of India Council
in 1835. Its basis is the law of England freed from superfluities, technicalities and local
peculiarities. Elements were also derived from the Napoleonic Code and from Edward
Livingston's Louisiana Civil Code of 1825. The first final draft of the Indian Penal Code was
submitted to the Governor-General of India in Council in 1837, but the draft was again revised.
The drafting was completed in 1850 and the Code was presented to the Legislative Council in
1856, but it did not take its place on the statute book of British India until a generation later,
following the Indian Rebellion of 1857. The draft then underwent a very careful revision at the
hands of Barnes Peacock, who later became the first Chief Justice of the Calcutta High Court,
and the future puisne judges of the Calcutta High Court, who were members of the Legislative
Council, and was passed into law on 6 October 1860. The Code came into operation on 1
January 1862. Macaulay did not survive to see his masterpiece come into force, having died
near the end of 18591

Objective
The objective2 of this Act is to provide a general penal code for India. Though not the initial
objective, the Act does not repeal the penal laws which were in force at the time of coming into
force in India. This was so because the Code does not contain all the offences and it was
possible that some offences might have still been left out of the Code, which were not intended
to be exempted from penal consequences. Though this Code consolidates the whole of the law

1
www.wikipedia.com
2
GAUR K.D ; TEXTBOOK ON INDIAN PENAL CODE ; LEXIX NEXIX 6TH EDN ; 2016

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on the subject and is exhaustive on the matters in respect of which it declares the law, many
more penal statutes governing various offences have been created in addition to the code.

About 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”.
Section 415 to 420 of the Indian Penal Code deals with cheating. To hold a person guilty of
cheating as defined under Section 415 of the Indian Penal Code, it is necessary to show that he
has fraudulent or dishonest intention at the time of making the promise with an intention to
retain the property. In other words, Section 415 of the Indian Penal Code which defines
cheating, requires deception of any person (a) inducing that person to : (I) to deliver any
property to any person, or (ii) to consent that any person shall retain any property or (b)
intentionally inducing that person 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, anybody's mind, reputation or property
Cheating can be done by various ways. Such as: -
Misrepresentation as to caste- A 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.
Making false entries in book of accounts: - if some person makes 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 about any professional qualification which he does not possess the it amounts to
cheating. Cheating Can Also Be by Personation Section 416 of the Indian penal code give some
more dimension of cheating i.e., cheating by personation. A person is said to have an offence
of cheating by personation when he impersonates some real or imaginary person then he really
is. Such personation may be to induce that person to do some act or omission or to induce him
to deliver some property.
This Section can be divided in three parts which are: -

(1) Presentation by the person to be some other person

(2) Knowingly substituting one person for another.
(3) Representation that he or any other person is a person other than he or such other person
really is.
This also constitutes false representation as to caste, as to be bachelor or to be any professional.

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 The punishment for cheating is defined under section 417 which provides for an
imprisonment extending to one year or fines or both. Cheating is also considered as a grave
offence if it is done by a person who holds certain duty by law or relationships or any other
way to protect the interests of the complainant. E.g., Guardians, trustee, solicitor, agents,
managers etc. Offence of such person is treated as grave because this person normally enjoy
trust more than any other person, so it is not expected out of them to cheat.

Section 417 in The Indian Penal Code – Punishment for cheating.

Whoever cheats shall be punished with imprisonment of either description for a term which
may extend to one year, or with fine, or with both.

Section 418 in The Indian Penal Code – 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 prescribes the punishment for cheating by a person standing in a fiduciary capacity
to the person cheated such relationship exists between a Banker and customer, the principal
and an agent, Guardian and ward, director of a company and the shareholder etc.

Ingredients
 The accused cheated a person whose interests he was under a legal obligation to protect;
 The accused knew that he was likely to cause wrongful loss to such person.
 The offense is non-cognizable, bailable and compoundable with the permission of the
court.

Section 419 in The Indian Penal Code – Punishment for cheating by personation.
Whoever cheats by personation shall be punished with imprisonment of either de-scription for
a term which may extend to three years, or with fine, or with both.

Section 420 in The Indian Penal Code – Cheating and dishonestly inducing delivery of
property.
Whoever cheats and thereby dishonestly induces the person de-ceived to deliver any property
to any person, or to make, alter or destroy the whole or any part of a valuable security, or
anything which is signed or sealed, and which is capable of being converted into a valuable
security, shall be punished with imprisonment of either description for a term which may
extend to seven years, and shall also be liable to fine. This section is an aggravated form of
cheating and provides enhanced punishment which may extend to 7 years of imprisonment
(simple or rigorous) and fine. The section applies to those cases of cheating which involves
delivery of property or destruction of a valuable security.

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 Essentials for cheating
Main ingredients for the first part.
1.The accused deceived some person.
2.By deception he induced that person.
3. The above inducement was fraudulent and dishonest.
4.The person so induced delivered some property to or consented to the retention of some
property by any person.

Main ingredients for the second part

1.The accused deceived some person
2.The accused thereby induced him
3.Such inducement was intentional
4. The person so induced did or omitted to do something
5.Such act or omission caused or was likely to cause damage or harm to the person induced
in body, mind, reputation or property.

DECEPTION
One of the initial ingredients of Cheating which must be provided to establish the offence of
cheating is deception, which must precede ant thereby induce the other person to either (a)
deliver or retain property; or (b) to commit the act or omission as referred in sec 415 of the
code. Deceiving can be said as making a person believe what is false or not letting him believe
what is true, and either words or actions may represent such deception.
As to what constitutes deception has been held by the courts to be a matter of evidence in each
case and dependent upon the facts and circumstance of each case. But nevertheless, it is the
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.

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 Modes of cheating

There are various ways through which the offence of cheating can be committed. They are:
Caste Misrepresentation:
when a person represents himself as a member of a caste to which he do not belong is
committing an offence of cheating.
Showing false accounts:
when a person shows false accounts of himself or of some other person to clear a debt, then is
said to commit the offence of cheating.
Creating false evidence:
when a person gives false evidence regarding some event then he can be held liable for the
offence of cheating.
False professional qualification:
when a person shows false professional qualification to acquire a post or job then he is said to
commit the offence of cheating.

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 Case Study
Bhola Nath v. State
Fact of the case3
M/s. Bhagat Industrial Corporation Limited has its register office at Khasa, District Amritsar
and its Head Office is situated at 54, Janpath, New Delhi. It deals in Indian manufactured
foreign liquor and had wholesale licence for the same in Uttar Pradesh uptill 31st March,
1976. The wholesale business of liquor in Uttar Pradesh was being managed from its Branch
at Kanpur Cantonment. Since the company was left with huge quantities of unsold stock by
end of the term of its licence, the licence was extended up to 30th April, 1976 and as per
terms of the licence the Complainant was required to sell the unsold quantity to a wholesale
merchant only after obtaining prior permission of the District Excise Authorities, Kanpur. On
1st November 1976, the Complainant lodged a report through Mr. O. N. Seth, their Export
Manager, with Police Station Cannaught Place, New Delhi, contending that some time in the
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 the
same were returned unpaid with the endorsement "refer to drawer" on two cheques and "not
arranged for" on the other two cheques. The Bhagat corporations further said that after the
removal of the goods and subsequent to the dishonour of the cheques, the Bhola Nath Arora
and others did not at all contact the Bhagat corporations and inform them as to why the
cheques had been dishonoured. Thus, it was alleged that the Bhola Nath Arora and others had
dishonest intention right form inception and with intent to cheat the Bhagat corporations and
cause 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

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www.indiankanoon.com

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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.

REASONING & JUDGMENT IN CASE

REASONING
In the Indian judicial system always the burden of proof lies on the complainant and not the
accused. But in this case the major thing taken up by court was that mere no efforts being
done by the accused regarding payment of post dated cheque was enough to show that they
were guilty of the offence. This approach of the court can be rather seen as more near to the
English courts. English courts follow a system in which jury itself tries to find out that what
is the true situation and conditions in which offence was committed whereas in our system it
is burden of the complainant to show that other party has an dishonest intention. But this
some times may become hard for the precaution to do so. The prosecution can only establish
some objective facts as to warrant an inference of fraudulent intention on the part of the
accused and it is them for the accused and it is then for the accused to come forth with facts

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within his special knowledge to show that despite reasonable precautions taken by him he
could not prevent the cheques being dishonoured. In other words, dishonour of cheques was
accidental and not known and expected consequence of his conduct. In the instant case as
many as four cheques were dishonoured on different dates. The bank account shows that at
no stage any attempt was made by the petitioners to pay in sufficient amount for encashment
of the cheques.
No doubt, the drawing up of a cheque does not imply any representation that the drawer has
money in the Bank to the amount shown in the cheque, for he may either have authority to
over-draw or have an honest intention of paying in the necessary money before the cheque
can be presented. In this context a post-dated cheque is a mere promise to pay on a future
date and the mere facts that the cheque is dishonoured may not in itself give rise to a criminal
offence. However, the position is different where the property is purchased by the accused
and the price is paid by cheque. In such a case there is an implied representation that (i) the
cheque is a good and valid order for payment of the amount and, (ii) that the cheque would be
paid when presented for payment. Illustration (f) to S. 415, Indian Penal Code, provides a
clue to the mind of the legislature in such matters. The said illustration is as under :-
"A intentionally deceives Z into a belief that A means to repay any money that Z may lend to
him and thereby dishonestly induces Z to lend him money. A not intending to repay it. A
cheats."
On its plain language it is manifest from this illustration that what is material is the intention
of the drawer at the time the cheque is issued, and the intention has to be gathered from the
facts on the record. If from the circumstances it is established that the failure to meet a
cheque was not accidental but was the consequence expected by the accused the presumption
would be that the accused intended to cheat.
The general principle of law is that all crime is local and the jurisdiction to try a person for an
offence depends upon the crime having been committed within the area of such jurisdiction.
The word "ordinarily" has been construed to mean "except where provided otherwise in the
Code. That is why the Sections viz. 178 to 182 of code of criminal procedure constitute
exceptions to the general rule. For obvious reasons that Section 182 being a more specific
provisions will govern the venue of trial in cases of cheating leading to delivery of goods and
as such it will exclude the general principle of jurisdiction is devoid of any merit. On a mere
juxtaposition of the two Sections 177 and 182 of the Code, it is manifest that the latter
provision supplements and does not supplant the general rule. It is intended to provide for the
difficulty that may sometime arise in prosecuting a person in a Court within whose territorial
jurisdiction deception has been allegedly practiced for want of requisite proof. Thus it is an
enabling Section and provides alternative venue of trial so as to ensure that the accused does
not get away with the ill-gotten fruits of crime on some technical ground or for want of
adequate proof of its commission in a particular area of jurisdiction.
It is a well settle rule of interpretation that the provisions of a statute should be so read as to
harmonize with one another and the provisions of one Section cannot be used to defeat those
of another unless it is impossible to effect reconciliation between them. Considering the true
meaning of the words or expressions used by the legislature the Court must have regard to
main object and scope of the statute to be read in its entirety.

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It is thus the duty of the Court to give a harmonious construction to both the provisions so
that full effect may be given to both without one excluding the other, there being no seeming
conflict or repugnancy in the two. Hence, when Section 177 conveys a clear meaning it is not
permissible to construe the same with reference to another Section i.e. 182 for the purpose of
controlling or diminishing the efficacy of the former. More so, when there is nothing in the
language of the latter which will control or impinge upon the effect of Sec 177. Surely, it is
not intended to abrogate the general rule of jurisdiction with regard to the trial of criminal
offences and it is merely supplemental thereto.
Giving this reasoning court says that there is no escape from the conclusion that the Court at
the place where deception is practiced and inducement is made to the person cheated to
deliver property will have jurisdiction to try the offence and the Courts mentioned in Section
182 will also be competent to try the said offence in addition to such a court. Thus the
question of jurisdiction is cleared up by the court.

Judgment
Firstly the court held that case was within the jurisdiction of the court as the place where
inducement to deliver the property on basis of cheque, which were later dishonoured, it can
be clearly read under section 182 of the Cr. P. C. and thus courts at Delhi held the
jurisdiction.
Secondly the main question of proving of cheating on the basis of dishonour of
cheques was also established as the facts clearly said that at no time any effort was done by
the accused to pay the necessary amount in the bank to clear the cheque. This can be struck
down by the fact that there was some alleged dispute regarding the quality as.
Case Law: S.W. Palanitkar V. State of Bihar- 2001(10) TMI 1150-

Supreme Court
Under this case Supreme court held that to convict a person for the offence of cheating there
should be pre-existing dishonest or fraudulent intention of the person from the beginning but
in case of Breach of Contract the dishonest intention is not present in the beginning of the
agreement

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 Conclusion

Cheating is an offence under which a person induces the other to deliver the property or
commission or omission of an act done on the part of the offender with the intention of
deceiving the person. Mainly two elements are necessary to constitute the offence of cheating
i.e. deception and inducement. Cheating is confused with various other civil and criminal
offences but it differs from each of them in some or the other way.

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REFRENCES:
1. WWW.manupatra.com
2. GAUR K D ; TEXTBOOK ON INDIAN PENAL CODE ;LEXIX NEXIX;
6TH EDN.;2016;
3. SAXENA, R.N., INDIAN PENAL CODE, CENTRAL LAW
PUBLICATION,
4. MISHRA, S.N., INDIAN PENAL CODE, CENTRAL ALW
PUBLICATION,
5. www.indiankanoon.com
6. www.wikipedia.com

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