Nisman Parpia
We have been familiar with the word cheating in our day to day language which means to trick somebody or deceive them to have an unfair advantage for our own self. It includes acting in a dishonest or fraudulent manner to deceive others and deprive something valuable. For instance: A boy cheating in an exam using unfair means to procure good marks and pass the semester.
In legal terms, cheating under Section 420 of Chapter XVII, is a punishable offence under the Indian Penal Code, 1860 (hereinafter as IPC). It has been defined under section 415 stating any person who intentionally induces another person to commit or omit any act which he would not have committed if he would not have been tricked to do so and the act has harmed that person in mind, body, reputation, or property then that person who induced the other person is set to commit the offence of cheating.
It includes fraudulently misleading deceiving a person in order to induce him or her to deliver a property to any other person or to consent to retain any property. Cheating also includes dishonest concealment and hiding of facts necessary to make a person do an act which he would not have done otherwise.
Illustration:
- ‘A’ by drawing a counterfeit mark on an article which resembles a branded article makes ‘B’ believe that this article is produced by a celebrated manufacturer worth a lot of money, and fraudulently sells B the article. Here A has cheated.
- Mr ‘X’ by falsely pretending to be in civil services, purposely deceives Mr ‘Y’ and dishonestly induces him to let him have goods on credit for which he does not mean to pay in future. Mr X cheats.
- Raj sells and conveys an estate to Seema. Raj knows that in consequence of such sale he has no right to the property, sells or mortgages the same to Riya, without disclosing the fact of his earlier sale and conveyance to Seema, he receives mortgage money from Riya too. Here Raj has cheated.
- Soha intentionally deceives Reema to believe that she has performed her part of a contract made with Reema which she has not performed and by saying this she dishonestly induces Seema to pay money, Soha cheats.
- Ramya pledging as pearl article which she knows are not pearls, intentionally deceives Mrs Gupta, and thereby dishonestly induces Mrs Gupta to lend her some cash. Ramya not intending to repay it, cheats.
- Rohan intentionally deceives Mohit to believe that Rohan means to repay all the money that Mohit will lend to him and thereby dishonestly induces Mohit to lend him money. Rohan has no intention to repay it, thus cheats.
- ‘C’ intentionally tricks ‘Z’ into a belief that C means to deliver to Z a particular reputed quantity of indigo plant which he does not intend to deliver, and thereby with dishonesty induces Z to advance money upon the faith of such delivery. C cheats; but if A, at the time of acquiring 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 to a civil action for a breach of contract.
Essentials of cheating
- deception of a person.
- Fraudulently inducing the person for the delivery of any property to any person or to consent that any person shall retain any property or
- Intentionally making a person to do or omit an act which he would not do or omit unless he was deceived. The act or omission leads to harm in body, reputation, status, property and wealth or mind, including mental well-being.
Deception
Deception is necessary to charge for cheating, it is an act to make a person believe something which is not true. It can be done to induce the other person to either deliver or retain some property or to commit an act or omission.
In the case of K.R. Kumaran And Ors. vs State Of Kerala[1], a person who was admitted in the hospital was checked by the doctor and the doctor very well knew that the person won’t be able to survive. The doctor conspired with other accused and issued a life insurance policy for the person who was going to die and in order to do so, he certified to be fit and healthy.
This was done by the accused in order to get money from the insurance company after the patient dies. The court held the accused liable for the offence of cheating and deceiving the insurance company in order to earn benefits for his own good.
Wilful Representation and Cheating
A fraudulent representation or willful misrepresentation of a particular fact is made directly or indirectly While deceiving a person, with an intention to cheat.
In order to prove the offence, it is not only necessary to prove that a false representation was made by the accused but also that the accused knew that the representation was false and wilfully made so as to apprehend loss to the prosecutor. If the accused knowingly makes an erroneous representation which is false then the accused can be held liable for the offence of cheating.
Dishonest concealment of facts: Explanation section 415
Dishonestly hiding facts amounts to deception although not all concealment is of material facts, if it is done with a dishonest intention then it is deception. Such concealment may not be necessarily illegal but dishonest[2]. Dishonest concealment includes an instance where the accused has no legal obligation to speak but remains silent.[3]
Misappropriation in accordance with cheating
Cheating is closely related to misappropriation. Misappropriation is stated under Section 403 of IPC. Misrepresentation starts from the beginning of the act of cheating but in the case of misappropriation it is not mandatory that the offence of cheating will start from the beginning. Example – the accused may obtain a property in good faith but then later change his mind and misappropriate it in order to sell it for an advantage and to earn money. This may be done against the will or without the consent of the owner.
Deception and cheating- False promise to Marriage
The question arises as to whether a false promise to marry made by the accused to trick a woman in order to fulfil sexual intercourse amounts to cheating or not.
In the case of Mailsami v. State of Tamil Nadu[4] the accused made promises to marry, had sexual intercourse and made the woman pregnant. When the woman was six months pregnant, the accused laid down a condition to marry which included abortion of pregnancy, but the victim refused to abort.
The court decided that the deception of the accused had induced the woman to do something which she would not have done if not deceived and induced to do so. this amounts to cheating that was made punishable under section 417 of the Indian penal code.
Inducement
After the accused has deceived the victim there must be an inducement to either deliver a property or to believe it to be retained or to do something or omit to do something without which mere deception would not amount to the offence of cheating.
In the case of Shri Bhagwan Samardha Sreepadha Vallabha Venkata Vishwanandha Maharaj v. State of Andhra Pradesh, the accused claimed to possess divine powers. He induced the perpetrator that he can treat the dumbness of his girl. This amounted to the offence of cheating.
Necessity of dishonest intention
If the mental element of dishonesty or fraudulence is absent while inducing the victim, it doesn’t amount to cheating. Dishonest intentions with zero intent to honour them is essential for cheating to take place.in the case of Dr Sharma’s Nursing Home v. Delhi Administration[5], the accused had assured the prosecutors to provide air conditioned rooms.
The prosecutors were not provided with it rather they were charged with the fee of the same. The supreme court on an appeal held that there was no evidence for proving the presence of dishonest intentions of the accused. Hence non fulfilment of promises does not amount to cheating.[6]
Sustaining loss not a criterion for establishing cheating
Under Indian penal code, section 420 a consumer entitled to benefit from the products or goods, services can sue the accused for the offence of cheating irrespective of whether any loss was suffered by him or not, even if the complainant does not occur loss, he can still bring a lawsuit for the offence of cheating.
Damage caused or likely to be caused
Cheating causes or is likely to cause damage or hurt to the victim’s body, mind, reputation, or property which must not be in consequence of any other act or unconnected omission. The relation between the damage or harm and the act of cheating must be proximate and not remote or vague.
When no damages are caused to the complainant by the act of cheating, the accused according to Section 420 of the IPC will still be liable for the offence of cheating as it creates an apprehension in the mind of an individual when he is cheated on by another person. Here the intention of the deceiver plays a pivotal role.
Civil liability v. Criminal liability
The difference of whether the case of cheating is civil nature or criminal one lies in the deception, dishonesty, fraudulent and inducement of the accused but mostly the accused merely fails to perform his part of contract in a civil dispute which creates an absence of dishonest intention. Mere breach of contract cannot be cheating under Section 420 of IPC unless it is proved that dishonest intention was present from the start of the transaction.
Punishment for cheating
Section 416- A person is said to cheat by personation when he cheats pretending to be another person or by knowingly substituting himself with someone else or representing that he or any other person is a person which he or any other person is not.
The individual here is committed irrespective of whether the individual has personated an imaginary or a real person.[7] The punishment includes imprisonment for either description for a term extending to 3 years or fine or both under section 419.
Illustration: Mr ‘X’ has cheated pretending to be a certain rich banker of the same name, here he has cheated by personation.
Section 417- Simple cheating is A punishable offence with imprisonment for a term extending to one year or with fine or with both fine and imprisonment.
Section 418- The section here portrays cheating with knowledge that wrongful loss will occur to a person whose interest the offender is bound to protect. Here the person has a fiduciary duty of trust bound by law or legal contract.
The person committing such an offence shall be punished with imprisonment for a term which may extend to 3 years or with fine or both. Intention is an essential to be proved for conviction under this section. Here cheating can be done by trustees, agents, guardians, solicitors, manager of a Hindu family, manager of a company or a bank etc. It was held in the case of S Shankarmani & Ors v. Nibar Ranjan Parida[8], although there is a fiduciary relationship, if the accused does not have a dishonest intention to cheat, it will not be considered as an offence under the section.
Section 420- A person cheating and dishonestly inducing a person to deliver any property to any person or to make, alter or destroy a part or whole of valuable security, which is signed or sealed, and which is capable of being converted into valuable security shall be punished with imprisonment either a term extending to 7 years and shall also be liable to fine. In the case of Anilchandra Pitambardas v. Rajesh 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.[9]
Conclusion
The most essential ingredient for cheating is mens rea which refers to the mental state or intention of the person who is committing an offence. The two other constituents for cheating include deception and inducement. The intention of making a false representation is mandatory to be proved, it has to be shown that a promise was made by the accused which he failed to keep and later no effort was put in to adhere to the promise.
Section 415 restricts to cheating in general and the punishment for it has been stated in section 417, but section 420 refers to aggravated type of cheating which includes pre-existence of dishonest or fraudulent intention in the mind of the accused which has been defined in section 24 and 25 of the IPC respectively.
- K.R. Kumaran And Ors. vs State Of Kerala 1961 CriLJ 98 ↑
- Surendra Meneklal v. Bai Narmada, AIR 1963 Guj 239 ↑
- Banwarilal v. State of Uttar Pradesh, AIR 1956 All 341 ↑
- Mailsami v. State of Tamil Nadu (1994) CrLJ 2238 (Mad), ↑
- Dr Sharma’s Nursing Home v. Delhi Administration (1998) 8 SCC 745 ↑
- Ajay Mitra v. State of Madhya Pradesh, AIR 2003 SC 1069 ↑
- Re K Rama Rao, AIR 1960 AP 441 ↑
- S Shankarmani & Ors v. Nibar Ranjan Parida (1991) Cr LJ 65 (Ori) ↑
- 1991 Cr LJ 487(Bom) ↑
References
- Cheating: Concept, Essentials and Case Laws
- Cheating: a criminal offence under the Indian Penal Code
- Cheating and dishonestly inducing delivery of property
- Cheating
- Section 420 IPC: Everything You Need To Know
- Section 415 in The Indian Penal Code