PROJECT

REPORT ON

CHEATING
IN PARTIAL FULFILLMENT FOR THE REQUIREMENTS OF THE
COURSE B.COM LL.B. (HONS.) IN THE SUBJECT
OF
INDIAN PENAL CODE - II

UNIVERSITY INSTITUTE OF LEGAL STUDIES,

PANJAB UNIVERSITY

SUBMITTED TO- SUBMITTED BY-

MS. PUSHPINDER KAUR DINKAR JAIN
UILS,PU,CHD. 212/20
B.COM LL.B. SEC-D
SEMESTER - VI
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 ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to my teacher

Ms. Pushpinder Kaur who gave me the golden opportunity to do
this project on the topic “Cheating”. While doing research on this
project, I came to know about a lot of things related to this topic.
Finally, I would also like to thank my friends who helped me a lot
in finalizing this project within the limited time frame.

Dinkar Jain
B.Com. LL.B.
Section – D
212/20

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 CONTENTS
Sr. No. Particulars Page No.
1 Introduction and Scope 4
2 Essential Ingredients of Cheating 5
3 Deception 6
4 Inducement 7-8
5 Damage to Body, Mind, Reputation or Property 9
Caused or Likely to be Caused
6 Punishment for Cheating 10

7 Cheating by Personation 11
8 Case Law- MR K S MAHADEVAN v. MR CYPRIAN 12
MENEZES
9 Case Law- Rekha Jain v. The State of Karnataka & 13
Anr.
10 Case Law- Sarabjit Kaur v. State of Punjab and 14-15
Another and Critical Analysis
11 Data relating to the Offence of Cheating (2021) 16-17
12 Conclusion 18
13 Bibliography 19

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 Introduction and Scope
Chapter XVII of Indian Penal Code, 1860 covers offences related to property and ranges
from Section 378 which defines theft, to Section 462 which prescribes punishment for the
offence of breaking upon an entrusted property. The offences that are dealt with under this
chapter include, among others, theft, extortion, robbery, dacoity, cheating and forgery.
Section 415 of the Code defines Cheating as- 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”. Further, a explanation
is appended to the section- A dishonest concealment of facts is a deception within the
meaning of this section.

“Cheating” is defined in section 415, which can be put in its analytical form thus: Whoever,
by deceiving any person: (1) fraudulently or dishonestly induces the person so deceived: (a)
to deliver any property; or (b) to consent that any person shall retain any property; or (2) (a)
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 (b) which act or omission causes or is likely to
cause damage to that person in body, mind, reputation or property is said to “cheat”.
In cheating, there should first of all be deception. By means of this deception, a man is
deceived or cheated in two ways as indicated in (1) and (2) at the outset. In (1), the victim is
induced to deliver property. This delivery is indeed brought about as the result of fraudulent
and dishonest means used by the accused. In (2), there is no delivery of property, but the
victim is intentionally induced to do or omit to do anything which he would not do or omit,
if, he were not induced—in short, he is induced to do something to his own prejudice. Here,
the inducement need not be fraudulent or dishonest; it is enough if it is intentional.
Thus, section 415 has two alternate parts, while in the first part the person must
“dishonestly” or “fraudulently” induce the complainant to deliver any property, in the
second part, the person should intentionally induce the complainant (the person so
deceived) to do or omit to do a thing.
The main ingredients of section 415 which have to be proved to obtain conviction for
cheating are: (1) for the First Part: (a) the accused deceived some person; (b) by deception
he induced that person; (c) the above inducement was fraudulent and dishonest, and (d) the
person so induced delivered some property to or consented to the retention of some
property by any person, and (2) for the Second Part: (a) the accused deceived some person;
(b) the accused thereby induced him; (c) such inducement was intentional; (d) the person so
induced did or omitted to do something; (e) such act or omission caused or was likely to
cause damage or harm to the person induced in body, mind, reputation or property. 1

1 Divender Kumar Singla v Baldev Krishna Singla, AIR 2004 SC 3084

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 Essential Ingredients of Cheating
A very succinct elaboration of the scope of the definition of cheating is to be found in the
judgment of the Supreme Court in Hari Sao v State of Bihar.2 In this case, the appellants
were alleged to have dishonestly induced the station master of Sheonarayanpur railway
station to make an endorsement in the railway receipt of false particulars. The accused had
obtained allotment of an entire rail wagon for the proposed consignment of 251 bags of
chillies to Calcutta. The accused themselves had loaded the wagon. A day after the wagon
had been sealed and made ready for dispatch, some seals were found broken. The railway
authorities checked the wagon and found only 197 bags, filled with chaff (bhusa), and not
chillies, as mentioned in the railway receipt, which was countersigned by the station master.
The prosecution’s case was that this was part of a conspiracy to later on convert the rail
receipt as valuable security, thereby committing the offence punishable under section 420.
The Supreme Court, while considering the case, elaborated on the essence of section 415 as
follows: …
[A] person is said to cheat when he by deceiving another person fraudulently or dishonestly
induces the person so deceived to deliver any property to him or to consent that he 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 was 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.
In Ram Jas v State of Uttar Pradesh,3 the Supreme Court enumerated the essential
ingredients required to constitute the offence of cheating as follows:
(1) There should be fraudulent or dishonest inducement of a person by deceiving him;
(2) (a) the person so deceived should be induced to deliver any property to any person, or to
consent that any person shall retain any property; or

(b) the person so deceived should be intentionally induced to do or omit to do anything

which he would not do or omit if he were not so deceived; and
(3) in cases covered by (2) (b), the act or omission should be one which causes or is likely to
cause damage or harm to the person induced in body, mind, reputation or property.

2 AIR 1970 SC 843

3 AIR 1974 SC 1811

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 Deception
One of the initial ingredients which have to be proved to establish the offence of cheating is
deception,4 which must precede and thereby induce the other person to either (a) deliver or
retain property; or (b) to commit the act or omission referred to in the second part of
section 415. Generally speaking, “deceiving” is to lead into error by causing a person to
believe what is false or to disbelieve what is true, and such deception may be by words or by
conduct. A fraudulent representation can be made directly or indirectly.
Thus, in the case of Swami Dhirendra Brahmachari v Shailendar Bhushan,5 the accused,
Swami Brahmachari, was held to have knowingly made false assertions to the effect that the
yoga course run by him through the Vishwayatan Yogashram was recognised by the
Government of India, thereby inducing unwary students to obtain admission paying Rs
1,000 by way of caution deposit, thereby cheating students. Since the allegation against the
accused was prima facie held to be made out in the complaint and material collected by the
investigating authority, the Delhi High Court refused to quash the criminal complaint of
cheating pending against him.
As to what act constitutes deception, has been held to be a matter of evidence in each case
and dependent upon the facts and circumstances of each case. However, the element of
deception has been held to be the first stage of establishing the offence of cheating. Thus,
where there is no evidence of deception, then the offence of cheating has been held not to
be established. Similarly, deceit must have been practiced before the property is delivered.
The fraudulent or dishonest intention must be there at the time of making promise or
representation. Misrepresentation from the very beginning is a sine qua non of the offence
of cheating.6 By virtue of explanation to section 415, a dishonest concealment of facts is
tantamount to deception. Concealment can be dishonest even in the absence of legal
obligation or duty to speak. 7

Deception and Cheating in Connection with False Promise of Marriage

In Mailsami v State of Tamil Nadu,8 the Madras High Court had to consider the case of an
accused person who had made promises to marry a woman, and thereby got close to her
and made her pregnant. Subsequently, he put an impossible condition for marriage, namely,
that she should terminate the six months’ pregnancy, and when the women did not consent
for termination, he refused to marry her. The Madras High Court held that all the
ingredients of section 417 were established, including inducements, which made the victim
do something she would not otherwise have done. The high court, therefore, refused to
quash the criminal case pending against the accused.

4 Ramantar v Hari Ram, (1982) Cr LJ 2266 (Gau); Gurucharan Singh v Suresh Kumar Jain, (1988) Cr LJ 823 (Del).
5 Swami Dhirendra Brahmachari v Shailendar Bhushan, (1995) Cr LJ 1810 (Del)
6 VY Jose v State of Gujarat, (2009) 3 SCC 78
7 Banwarilal v State of Uttar Pradesh, AIR 1956 All 341
8 Mailsami v State of Tamil Nadu, (1994) Cr LJ 2238 (Mad)

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 Inducement
The second essential ingredient to the offence of cheating is the element of “inducement”
leading to either delivery of property or doing of an act or omission as pointed out earlier.
Section 415 clearly shows that mere deceit is not sufficient to prove the offence. The effect
of the fraudulent or dishonest act must be such that it induces the person deceived to
deliver property or do something (in the form of an act or omission). Thus, in either of the
two situations covered by section 415, the element of inducement leads either to delivery of
property or doing of an act or omission to do anything. Thus, in Shri Bhagwan Samardha
Sreepadha Vallabha Venkata Vishwanandha Maharaj v State of Andhra Pradesh,9 the
Supreme Court held that the representation made by the appellant-accused (Swami BSSVVV
Maharaj), that he had divine healing powers through his touches, thereby making the
complainant believe that he could cure his little girl of her congenital dumbness through his
divine powers was fraudulent and amounted to inducement. Thus, believing the promises,
the complainant was induced to believe in the divine powers and shell out money to the so-
called Godman. The court elaborated on the aspect of inducement:
If somebody offers prayers to God for healing the sick, there cannot normally be any
element of fraud. But if he represents to another that he has divine powers and either
directly or indirectly makes that another person believe that he has such divine powers, it is
inducement referred to in s 415 of the Penal Code. Anybody who responds to such
inducement pursuant to it and gives the inducer money or any other article and does not
get the desired result is a victim of the fraudulent representation. The Court can in such a
situation presume that the offence of cheating falling within the ambit of s 420 of the Penal
Code has been committed. It is for the accused, in such a situation, to rebut the
presumption.

Effect of Absence of Dishonest Inducement

In Dr Sharma’s Nursing Home v Delhi Administration,10 the prosecution case was that the
complainant got his brother admitted in the nursing home on assurance that air-
conditioned rooms were available. However, the room provided was not air-conditioned,
though he was charged for such a room. The trial court held that offence of cheating under
sections 415 & 429, IPC, was established. The Supreme Court, however, found that the
complaint and other documents did not reveal dishonest inducement. It noted that while
the lower courts had given findings on the issue of deception, they had not examined
whether the other essential ingredient of section 420, namely, dishonest inducement had
been established. In the above case, there was no material from which it could be held,
even prima facie, that the appellant had been “dishonestly induced” to part with his money.
Hence, the offence of cheating could not be said to have been established.

9 AIR 1999 SC 2332

10 Dr Sharma’s Nursing Home v Delhi Administration, (1998) 8 SCC 745

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Dishonest Intention Should be Present at the Time of Making the Promise
It is necessary to consider that for the offence of cheating to be made out, the inducement
by the accused to the complainant must have been made in the initial or early part of the
transaction itself. Here too, what is important is to prove that at or about the time that the
person induced was made to part with money, the respondents (i.e., alleged accused
persons) ought to have known that their representation was false and that the
representation was made with the intention of deceiving the other person. If this is not
shown, then the dispute is only civil in nature. 11 Mere breach of contract cannot give rise to
criminal prosecution for cheating unless fraudulent or dishonest intention is shown at the
beginning of the transaction. If the intention to cheat has developed later on, the same
cannot amount to cheating. The distinction between mere breach of contract and cheating
depend upon fraudulent inducement and mens rea. 12

Sustaining Loss not Criterion for Establishing the Offence of Cheating

In State v Ramados Naidu,13 the accused persons had obtained loans from the Land
Development Bank for digging new wells in their agricultural lands and purchasing new oil
engines without actually doing any of these things. However, the bank had not suffered any
loss on account of these transactions, as the loans were fully covered by the security of
immovable properties and the loans had been repaid in full. Nevertheless, the accused were
convicted for cheating under sections 415 and 420.

The Madras High Court observed that the following three ingredients have to be established
in the offence of cheating: First, there has to be practice of deception by the offender.
Secondly, on account of the deception, there must be fraudulent or dishonest inducement
so as to make the person deceived to deliver any property or to do something or omit to do
something, etc. Lastly, by reason of delivery of the property or the doing of a thing or the
omission to do a thing, there must be the causing of, or the likelihood of the causing of,
damage or harm to the person deceived in body, mind, reputation or property. Thus, as a
result of the dishonest inducement of a person, there can be either wrongful loss to the
person deceived or wrongful gain to another, including the person practicing the deception.
Whenever any one of these results follows on account of the deception practiced by a
person, then the offence of cheating would be complete.
In the above case, the accused persons obtained loans from the bank by making fraudulent
representation to the bank. Therefore, even though each advancement of loan was made
on the security of property and on account of it there had been no loss to the bank, yet it
follows that each of the borrowers had made a wrongful gain to himself by making
dishonest representation to the bank in getting the loan amount, therefore, the borrowers
in each case had committed the offence of cheating.

11 Hari Prasad Chamaria v Bhisun Kumar Surekha, AIR 1974 SC 301

12 Satishchandra Ratanlal Shah v State of Gujarat, AIR 2019 SC 1538
13 State v Ramados Naidu, AIR 1970 SC 843

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 Damage to Body, Mind, Reputation or Property
Caused or Likely to be Caused
The use of the term “cause” in section 415 postulates a direct and proximate connection
between the act or omission and the harm and damage to the victim. It excludes damage
occurring as a mere fortuitous sequence, unconnected with the act induced by deceit. On
the other hand, the definition, as it stands, is wide enough to include all damages resulting
or likely to result as a direct natural or probable consequence of the induced act. 14 The loss
or damage to the victim arising from the act of cheating must be proximate and not vague
or remote.38 It must be a natural consequence of the act or omission in question and not a
contingent one.39 The critical aspect that has to be proved for establishing the offence of
cheating is the fact that some damage has been caused or that some damage is likely to be
caused to body, mind, reputation or property.
When no Damage Caused to Complainant
In the case of Hari Sao v State of Bihar,15 the Supreme Court held that the false
representation made by the accused to the station master leading to his making
endorsement on the receipt, could not, even if established as a dishonest or fraudulent act,
cause any damage or harm to the railway. Thus, no question of cheating the railway or the
station master arose. On this count, the accused were acquitted.
When no Benefit Accrued to Accused but Loss to Complainant Company

A different dimension on this issue of causing or likely to cause damage as an element of the
offence of cheating was considered by the Supreme Court in Ram Prakash Singh v State of
Bihar.16 In this case, an employee of the Life Insurance Corporation, (LIC) was accused of
having introduced fake and false insurance proposals to the Corporation. The proposals
were forged in the name of non-existent persons by the accused in his own handwriting.
The accused sought to take advantage of his inflated business by introducing the fake
proposals to gain promotions. Although, the accused himself did not gain any benefit, there
was loss to the LIC for issuance of insurance policies, even if this was only a negligible sum.
According to the Supreme Court, such fake or forged proposals are bound to affect the
reputation of the insurance company. Hence, his conviction for the offence of conspiracy to
cheat was upheld.

14 Legal Remembrancer v Manmatha Bhusan Chatterjee, AIR 1924 Cal 495

15 AIR 1970 SC 843
16 AIR 1998 SC 296

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 Punishment for Cheating
[s 417] 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.
[s 420] Cheating and dishonestly inducing delivery of property.—Whoever cheats and
thereby dishonestly induces the person deceived 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.
Section 415 of the IPC defines the offence of cheating, which is made punishable by
sections 417 and 420, IPC. Section 417 provides punishment for a simple case of cheating,
whereby, the person cheated is injured otherwise than by being induced to part with
property.46 The second part of section 415 not involving fraud or dishonesty is thus made
punishable leniently as compared with the maximum sentence provided for the offence
constituted by the first part of the section.

Section 420 deals with certain aggravated forms or specified classes of cheating. It deals
with cases of cheating, whereby, the deceived person is dishonestly induced: (a) to deliver
any property to any person; or (b) to make, alter or destroy: (i) the whole or any part of a
valuable security; or (ii) anything which is signed or sealed, and which is capable of being
converted into a valuable security.47 It is required to prove that the complainant has parted
with the property due to dishonest inducement of the accused.48 The property so delivered
must have some money value to the person cheated.49
The terms of punishment provided for in both the provisions vary. Thus, while section 417
provides for imprisonment of a term which may extend to a year, or fine or both, an
offence under section 420 becomes liable for a sentence of imprisonment for a term up to
seven years with fine. It should be noted that fine is an optional punishment under
section 417, whereas for offence under section 420, once conviction is recorded and
sentence of imprisonment awarded, fine also has to be imposed.

Another distinction needs to be noted between sections 417 and 420. While both are
penalising sections, it is said that if delivery of property is obtained fraudulently, then the
offence is punishable by section 417; on the other hand, if the property delivered is due to
dishonesty, then it will be covered by section 420. Hari Singh Gour provides the following
situation to illustrate this difference:
A, may by false representation, induce B to advance him a sum of money in such
circumstances that A is aware that he is exposing B to risk of loss but without intention of
causing him wrongful loss. A then would be acting fraudulently and would be punishable
only under s 417, IPC. However, if he intended to cause wrongful loss, he would be acting
dishonestly and would be punishable under s 420, IPC.

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 Cheating by Personation
[s 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.
Explanation.—The offence is committed whether the individual personated is a real or
imaginary person.
Illustrations
(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.

[s 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 of cheating by personation
and section 419 provides punishment therefor. Therefore, to convict a person under section
419, it is necessary to prove the elements of section 416.
However, it is not necessary to prove who was being impersonated, for the person
impersonated could be an imaginary person, non-existent or unknown.17 However, what has
to be established is that the accused impersonated somebody, or else the offence is not
established.18 As to the form of impersonation, the section does not elaborate on whether it
is through words spoken, or dress or by conduct

17 Re K Rama Rao, AIR 1960 AP 441

18 State of Madhya Pradesh v Padam Singh, (1973) MPLJ 129

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 LATEST CASE LAWS ON THE OFFENCE OF CHEATING
MR K S MAHADEVAN v. MR CYPRIAN MENEZES
WRIT PETITION NO. 54069 OF 2017, DECIDED ON 9TH DAY OF SEPTEMBER, 2022

Facts- A private complaint has been filed by the first respondent - complainant alleging that
the petitioner had represented that he could put across the complainant to such Senior
Advocates who could represent the matter and obtain favourable orders. It is on that basis,
various amounts were paid to the petitioner to be paid to the Advocate appearing before
the Supreme Court as also to enable the petitioner to travel to Supreme Court and appear in
the said matter. It is alleged that on 18.04.2016, when the matter was taken up for hearing
before the Apex Court and at the end of the day when the complainant called the petitioner
enquiring about the status of the matter, the petitioner did not inform him properly and as
such, the complainant suspected the bonafides of the petitioner and it is on that basis a
criminal complaint came to filed seeking for action to be taken against the petitioner. It was
discovered that on that day, the matter after hearing was only adjourned and no favourable
orders was passed.
Issue- Whether in the facts on the instant case not being able to secure favourable orders
by the petitioner could be said to be a offence of Cheating?
Judgment- Quashing the proceedings against the petitioner, the Apex Court held that
merely because a client were not to succeed in the matter and favourable orders were not
passed in favour of that particular client, the said client cannot make out a case that there is
a fraud which has been committed by the Advocate and offence under Sections 406 and 420
of IPC which has been committed by an Advocate. That would lead to disastrous
consequences. It is for all litigants to understand that an Advocate can only make best
efforts in the matter and the case would be decided on the basis of merits.

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 Rekha Jain v. The State of Karnataka & Anr.
CRIMINAL APPEAL NO. 749 of 2022

Facts- The Respondent No. 1 in the present appeal (original complainant), had lodged a
complaint against one Kamalesh Mulchand Jain, alleging, inter ¬alia, that by
misrepresentation, inducement and with an intention to cheat, the said Kamalesh Mulchand
Jain had taken away 2 kg and 27 grams of gold jewellery. Thereafter, an FIR was registered
for the offence under Section 420 of the Indian Penal Code, 1860 and at the time of
investigation, it was found that Rekha Jain, the wife of the accused was absconding and the
gold jewellery, taken away from the original complainant by her husband Kamalesh
Mulchand Jain, was with her. Therefore, the investigation was carried out against her as
well. Rekha Jain approached the Hon'ble Karnataka High Court by way of a Petition under
Section 482 of the Code of Criminal Procedure, 1973, however, the Hon'ble Karnataka High
Court refused to quash the criminal proceedings/FIR. Thus, Rekha Jain approached the
Supreme Court.
Issue- Whether the Hon'ble Karnataka High Court has in fact committed a grave error in not
quashing the criminal proceedings against Rekha Jain under Section 482 CrPC?
Judgment- To make out a case against a person for the offence under Section 420 of the
Indian Penal Code, 1860, there must be a dishonest inducement to deceive a person to
deliver any property to any other person. In the present case, there is no allegation at all
against accused Rekha Jain of any inducement by her to deceive and to deliver the gold
jewellery. The allegations of dishonest inducement and cheating are against her husband,
accused Kamalesh Mulchand Jain. Thus, Allowing the appeal, the Hon'ble Supreme Court
observed that the The Hon'ble Karnataka High Court has in fact committed a grave error in
not so quashing the criminal proceedings against Rekha Jain, this being a fit case for exercise
of their powers in this regard.

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 Sarabjit Kaur v. State of Punjab and Another
CRIMINAL APPEAL NO. 581 OF 2023 IN THE SUPREME COURT

Facts- A first information report (FIR) was registered against the accused-appellant under
Sections 420 (cheating), 120B (criminal conspiracy) and 506 (criminal intimidation) of the
Indian Penal Code (IPC).The basis of this FIR was a third complaint made by the
complainant-respondent against the appellant with regard to allegations of cheating in an
agreement to sell of a property. In the previous two complaints which were based on the
same set of facts as the third complaint, the complainant-respondent had only made the
prayer for return of the amount paid by him in the agreement to sell with no allegation of
cheating. Moreover, the said complaints were only directed at the property dealers and not
against the appellant. However, in the third complaint, the complainant had accused the
appellant of cheating and other offences. On the basis of the same, the FIR Came to be
registered against the appellant. The appellant then moved the Punjab and Haryana High
Court seeking quashing of the FIR, but the plea was dismissed. This was challenged before
the Supreme Court.

Issue- Whether a mere breach of contract can give rise to a criminal prosecution for
cheating?

Judgment- The apex court after considering the sequence of complaints by the complainant,
observed that the effort of the complainant was merely to put pressure on the appellant in
order to get his money back. Moreover, it was also noted that no efforts were made by the
complainant to initiate any civil proceedings against the appellant to get the sale deed
executed on the basis of the agreement to sell. Rather, the complainant proceeded only by
filing three identical criminal complaints with the police. Taking note that the allegations
made in the complaint are civil in nature, the Court observed: "The entire idea seems to be
to convert a civil dispute into criminal and put pressure on the appellant for return of the
amount allegedly paid. The Criminal Courts are not meant to be used for settling scores or
pressurise parties to settle civil disputes.” Therefore, the Court allowed the appeal and
quashed the case.

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 CRITICAL ANALYSIS OF THE JUDGMENT
IN SARABJIT KAUR v. STATE OF PUNJAB
The crucial aspect to be noted in the law relating to cheating is the intention of the person
accused of cheating. Most often, especially in issues relating to commercial transactions, the
disputes are difficult to separate in terms of their civil and criminal liabilities. As stated
earlier, the crucial difference between a criminal cause of action as against a purely civil
transaction is the intention of the person at the time when the cause of action arose or the
alleged offence commenced. The important aspect is to examine whether at that stage,
the accused deliberately or intentionally induced the other person to part with property
or to do an act or desist from doing an act, or whether it was only subsequently that the
dispute arose.
In the instant case, the Apex Court while observing that the present case was of mere
breach of contract went on to further add that “A breach of contract does not give rise to
criminal prosecution for cheating unless fraudulent or dishonest intention is shown right
at the beginning of the transaction. Merely on the allegation of failure to keep up promise
will not be enough to initiate criminal proceedings.” The law thus is clear on the subject
that when there is a mere breach of contract, the appropriate forum to be approached is
the Civil Court. Though, in a given case, there may be other than the breach of contract ‘a
deliberate and intentional inducement by the accused’ right from the start and thus, it is
appropriate in such cases only to initiate the criminal proceedings. The practice of putting
pressure on the appellant for return of the amount allegedly paid by initiating criminal
proceedings is not apt and is to be condemned. The Criminal Courts are not meant to be
used for settling scores or pressurise parties to settle civil disputes.

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 Data relating to the Offence of Cheating (2021)
OFFENCE CASES (2021) CRIME RATE PERCENTAGE SHARE
OF IPC CRIME
CHEATING 104614 7.7 2.9
CHEATING BY 471 0.0 0.0
IMPERSONATION

In States/UTs19
Crime against Senior Citizens

A total of 26,110 cases were registered for committing crime against Senior Citizens (aged
above 60 years), showing an increase of 5.3% in registration over 2020 (24,794 cases).
[Table – 6A.1] Crime head-wise cases revealed that simple hurt with 28.3% (7,396 cases)
formed the highest chunk of cases of crimes against Senior Citizens followed by Theft with
13.5% (3,531 cases) and FCF (Forgery, Cheating & Fraud) with 11.3% (2,948 cases) during
2021.

Economic Offences

A total of 1,74,013 cases were registered under economic offences, showing an increase of
19.4% in registration over 2020 (1,45,754 cases). Out of three specified category of
economic offences viz. criminal breach of trust, FCF (forgery, cheating & fraud) and
counterfeiting, FCF accounted for maximum of such cases, with 1,52,073 cases, followed
by criminal breach of trust (21,241 cases) and counterfeiting (699 cases) during 2021.

Offences Relating to Documents & Property Marks

As compared to 1,28,396 cases in 2020, 1,52,772 cases were registered under offences
against documents & property marks in 2021 comprising of counterfeiting and FCF (forgery,
cheating & fraud), out of which, FCF (1,52,073 cases) accounted for 99.5% of total such
cases.

19 Source: Crimes in India – 2021

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In Metropolitan Cities20 (- >2 Million Population21)
Crime against Senior Citizens
A total of 4,264 cases of crime against senior citizens (aged above 60 years) were registered
in 19 metropolitan cities during 2021 as compared to 4,029 cases during 2020, showing an
increase in the registration by 5.8% during 2021 over 2020. Crime head-wise cases revealed
that Theft (28.3%, 1,208 cases) registered the highest number of cases of crimes against
Senior Citizens followed by FCF (Forgery, Cheating & Fraud) with 26.4% (1,124 cases)
during 2021.

Economic Offences
A total of 35,185 cases registered under economic offences, showing a decrease in
registration by 30.5% over 2020 (26,970 cases). In 19 metropolitan cities, out of three
specified category of economic offences viz. criminal breach of trust, counterfeiting and FCF
(forgery, cheating & fraud), maximum cases were registered under FCF (31,140 cases)
accounting for 88.5% during 2021.

Offences Relating to Documents & Property Marks

As compared to 24,630 cases in 2020, 31,259 cases were registered under offences relating
to documents & property marks during 2021 comprising of criminal breach of trust,
counterfeiting and FCF (forgery, cheating & fraud). FCF (31,140 cases) accounted for 99.6 %
of total such cases.

CONIVICTION RATE IN CASES OF ECONOMIC OFFENCES (ALL-INDIA)

There is a high pendency and poor conviction rate. At the end of 2021, the pendency rate
for economic offences under IPC was 55.1% for the police and 96.6% for the courts. On the
other hand, the conviction rate was only 29.4%. That is, less 3 out of 10 such cases result in
conviction. This is much less than the overall IPC related cases conviction rate of 57% in
2021.

20Source: Crimes in India – 2021

2119 Metropolitan Cities : Ahmedabad, Bengaluru, Chennai, Coimbatore, Delhi, Ghaziabad, Hyderabad, Indore,
Jaipur, Kanpur, Kochi, Kolkata, Kozhikode, Lucknow, Mumbai, Nagpur, Patna, Pune and Surat

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 Conclusion
Chapter XVII of Indian Penal Code, 1860 covers offences related to property and ranges
from Section 378 which defines theft, to Section 462 which prescribes punishment for the
offence of breaking upon an entrusted property. The offences that are dealt with under this
chapter include, among others, theft, extortion, robbery, dacoity, cheating and forgery.
Section 415 of the Code defines Cheating. In cheating, there should first of all be deception.
By means of this deception, a man is deceived or cheated in two ways as indicated in (1) and
(2) at the outset. In (1), the victim is induced to deliver property. This delivery is indeed
brought about as the result of fraudulent and dishonest means used by the accused. In (2),
there is no delivery of property, but the victim is intentionally induced to do or omit to do
anything which he would not do or omit, if, he were not induced—in short, he is induced to
do something to his own prejudice. Here, the inducement need not be fraudulent or
dishonest; it is enough if it is intentional.

Thus, section 415 has two alternate parts, while in the first part the person must
“dishonestly” or “fraudulently” induce the complainant to deliver any property, in the
second part, the person should intentionally induce the complainant (the person so
deceived) to do or omit to do a thing.

The main ingredients of section 415 which have to be proved to obtain conviction for
cheating are: (1) for the First Part: (a) the accused deceived some person; (b) by deception
he induced that person; (c) the above inducement was fraudulent and dishonest, and (d) the
person so induced delivered some property to or consented to the retention of some
property by any person, and (2) for the Second Part: (a) the accused deceived some person;
(b) the accused thereby induced him; (c) such inducement was intentional; (d) the person so
induced did or omitted to do something; (e) such act or omission caused or was likely to
cause damage or harm to the person induced in body, mind, reputation or property.
However, there is a high pendency and poor conviction rate of cases of economic offences.
At the end of 2021, the pendency rate for economic offences under IPC was 55.1% for the
police and 96.6% for the courts. On the other hand, the conviction rate was only 29.4%. That
is, less 3 out of 10 such cases result in conviction. This is much less than the overall IPC
related cases conviction rate of 57% in 2021.

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 Bibliography

Books/Materials referred
PSA Pillai’s Criminal Law, KI Vibhute, 14th Edition
Prof. S.N. Misra’s Indian Penal Code, Central Law Publications, 22nd Edition
Crimes in India-2021, National Crime Records Bureau, Ministry of Home Affairs

Online Resources referred

www.scconline.com
www.thehindu.com
www.primelegal.in
www.iblogpleaders.com

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