Cheating as an offence is popularly known as a case of 420 in layman’s language. We all must have heard that x has committed 420 or x is involved in 420 etc. However, a huge number of person does not know that why we label a matter of cheating as 420. So, in today’s article, we shall dwell upon the offence of cheating.
Cheating can be defined as an act by which a person tries to deceive another person to cause him to harm in his reputation, body, mind, property, etc by fraudulent or dishonest means. Cheating in some legislations is also a subject of civil laws and does not attract criminal liability, However, Cheating as an offence has been dealt with in IPC 1860 which shows the firm intention of the legislature to deal with it more stringently.
Provisions regarding cheating have been defined in the Indian Penal code in chapter XVII, Section 415-420 of the code deal with the offence of cheating. Section 415 defines the term cheating while S.417, 418, and 419 provide for punishment for the offence.
As mentioned earlier, Cheating has been defined in section 415 of the code. After the careful pursual of section 415, the offence of cheating has the following ingredients:
- Deception of any person.
- Fraudulently or dishonestly inducing that person:
- To deliver any property to any person or
- To consent that any person shall retain the property.
- Intentionally induces the person so deceived to do or omit to do.
- Such act shall cause damage or harm to that person in body, mind, reputation, or property.
Let us discuss the ingredients in details.
Deception of any person.
Section 415 starts with the words, “whoever by deceiving any person”. These words are to be read throughout the section. After analysis of the section, it becomes pertinent to mention here that section 415 provides two methods of cheating:
- Fraudulently or dishonestly inducing any person to deliver the property or to consent to retain the property. This is to be qualified by the words, by deceiving.
- Intentionally inducing a person to do or omit to do a thing which that person otherwise would not have done but for deceit.
So, Deception is the most important aspect of the offence of cheating, which is the first step(initiating step) of this offence. To deceit means, the dishonest behaviour that is intended to make someone believe something that is not true. For example, if X goes to Y and tells him that he is a lawyer and offers to marry Y’s Daughter though he is not a lawyer. Here he has deceived Y. So, deceit is causing us to believe what is false or misleading a fact. A deceived person doesn’t need to be that person to whom the false representation is made. A person may falsely represent one and thereby may deceive another.
In the first part of this section, the person by such deceitful means, fraudulently or dishonestly makes one deliver to consent to the retention of the property or causes an act or omission by such deceitful means.
In the case of false representation, it is not necessary that the representation was false, but it should also be not in the knowledge of the accused. Because if he does not know about the falsity of the fact, then he cannot be said to be falsely representing. In Motilal Chakrabarty (1950), where the accused sold some shares to the complainant, the accused did not know that shares were stolen property, so he can not be held responsible for deceit.
Fraudulently or dishonestly, induces the person deceived to deliver any property or to consent that any person shall retain the property.
Both the terms Fraudulently and dishonestly has been defined in the code itself. Section 25 defines ‘fraudulently’ as “ A person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise”.
Defraud and deceit is not synonymous words. Defraud is getting money by somebody illegally by deceiving. So, it can be said that defraud includes deceit and deceit does not include defraud.
Section 24 defines ‘dishonestly’ as “Whoever does anything with the intention of causing wrongful gain to one person and wrongful loss to another person is said to do that thing dishonestly”.
Section 23 defines the term wrongful gain and wrongful loss. Wrongful gain is gain to unlawful means of property to which the person gaining is not legally entitled. While Wrongful loss is a loss by unlawful means of property to which a person losing is legally entitled.
The fraudulent or dishonest intention must be at the time of the commission of the act regarding which the cheating is alleged and that fraudulent or dishonest intention must be to induce that deceived person to deliver any property or to induce him to give consent that any property is retained by any person. To constitute the offence of cheating, the inducement must be caused by fraudulently or dishonestly, as a consequence of the deceit. So if there is any deceit without any such inducement it will not be cheating. For example, a person says that he has divine powers and he does not have it, and somehow manages to make other people believe, it is deceit or false representation. But this alone is not an offence. By making him believe, he may further do some charms to get money or some article. This is an inducement, which is called as fraudulent representation. So if that other person, gives money then, it is said to cheating by fraudulent expression.
‘Property’ here may be an immovable property or moveable property. It is not required that the property must be measured in terms of money. It is sufficient if, for that person possessing it, it has some value. For example, a railway ticket, driving license etc.
In Ram Chand v. Jai dial, the accused was a judgment debtor. He applied for permission to raise the amount of decree by transfer of his house, which had already been sold in execution of a decree. The application was rejected. The accused then mortgaged the house to the complainant, representing that he was empowered to mortgage the house to pay off the decretal amount. He got the mortgage to pay the amount due to the decree-holder and received the balance himself. It was held that he has committed the offence of cheating.
Intentionally induces the person so deceived to do omit to do.
This clause states that, where a person by deceitful means, intentionally induces any person to do or omit to do a thing which otherwise, that person would not have done, and that act or omission of the person so deceived and intentionally induced suffers any harm in body, mind, reputation or property, then this amounts to cheating. So, there should be an inducement intentionally caused by the offender. ‘intentional inducement’ is an important aspect of this clause. This constitutes mens rea.
The act or omission by the person so induced must be the result of such inducement and by such act or omission, the person must suffer damage, and this damage must not be too remote.
In Kumaran(1961)case, the doctor entered into a conspiracy with the officers of the life insurance company and was induced to certify a dying man as a first-class life. This act of certifying is an inducement to the life insurance officers to enter into a contract and has also caused loss to the life insurance company. So, it was held this act was cheating.
Contract opposed to public policy.
Criminal prosecution is not based on the fact that a case is not allowed in a civil suit. For example, X promises to Y that if Y makes a favour to Z, forgetting his job, then he will pay a sum of Rs.50000 without any intention to keep it. Later he refuses to do so. This case cannot be enforced in a civil lawsuit. But this does not fetter the prosecution. Because the prosecution of cheating does not depend upon a contract. What is observed is only dishonest intention and thereby getting some benefit.
Cheating by personation(Section 416)
A person is said to “cheat by personation” if he cheats by pretending to 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 person really is”.
- By pretending to be the same person.
- By knowingly substituting one person for others or,
- By representing that he or any other person is a person other than he or such other person really is.
For constituting an offence under this section, there should be cheating as required under section 415 of the code.
By pretending to be the same person.
To pretend means to behave in a particular way to make other people believe that something is true. Here, when a person, by doing anything makes other people believe that he is a certain person, though he is not, is said to cheat, by personation. ‘Personation’ means to pretend to be a certain person.
For example, if A goes in a police dress in a house and makes them believe that he is a police officer and searches the house under a false search warrant and takes the valuables, is said to cheat by personation, under this clause.
Knowingly substitutes one person for another.
Under this clause, whoever, substitutes any person for another person, with such knowledge and thereby cheats any person is said to be done offence under this section.
For example, A, the father of B daughter, wants to get her marriage done. Then, when the proposed inlaws came to see his daughter A shows or presents C who happens to be a relative of A. Then when the marriage was solemnizing A substitutes his daughter B instead of whom in-laws had agreed for marriage. Here A has committed an offence under this section.
By representing that he or any other person is a person other he or such other person.
When a person represents himself to be some other person or represents that any other person is some other person, who is not the expected person, and cheats thereby any person, then he has committed the offence of cheating by personation.
For example, an old man is about to take his last breath, in some near dates. He makes a will in the name of his grandson, who has been residing in a foreign country by bequeathing a part of his property. He has no issues living, and hands over the will to an advocate. Later, he does, Z a person who was known of this fact, pretends to come from the foreign country and represents the advocate that he is the grandson of A, and gets the will executed in his name, here, he has committed the offence by representation.
Cheating and dishonestly inducing the delivery of property (Section 420)
Section 420 provides about cheating and dishonestly inducing delivery of property.
- Thereby, dishonestly inducing to deliver any property to any person.
To constitute an offence under this section, there must be cheating by any of the two methods, specified under section 415 and as a consequence of such cheating, the person cheating must with the deliberate intention to cause, wrongful loss to such person induce the cheated person to deliver any property or to make any valuable security, or to alter any valuable security or to deliver anything which is signed or sealed or which is capable of being converted into a valuable security.
This section is very wide and includes all kinds of dishonesty inducing, relating to a property, or valuable security. This is a graver offence compared to the offence punishable under section 417. The dishonest intention must be present at the time of committing act alleged under this section, apart form cheating.
Punishment for cheating
Punishment for cheating as envisaged under section 415 IPC is provided under section 417 and the section provides for imprisonment of either description for a term which may extend to one year or with fine or with both. While the offence under this section is Non-cognizable and bailable.
While punishment for the offence of cheating by personation as provided under section 416 is provided under section 419, which provides for imprisonment of either description for a term which may extend to three years or with fine or with both. An offence under this section is cognizable and bailable.
Punishment for section 420 which deals with cheating and dishonestly inducing the delivery of property extends to imprisonment up to 7 years and fine. The offence is cognizable and non-bailable which shows the gravity of the crime.
State vs Ramesh Chandu Sharma (1980)
In this case, the accused was charged with cheating bank A by encashing cheque through bank B by opening an account with it in a fictitious name. It was held that it was no cheating, it is also not personation.
Rama Rao vs K(1960)
The accused K.V Rama Rao was an overseer, had by his representation that he was k. Rama Rao, an engineering graduate of Mysore University, induces the public service commission to select him for a post in government service. It was held that all ingredients of section 416 are fulfilled and is liable under section 419.
Another important person when we talk about cheating is Mr. Natwarlal, who was one of the well-known con of India. He was known for selling popular monuments such as “Taj mahal”, “red fort”, “Rashtrapati Bhawan” also the “parliament of India” along with its sitting members.
The distinction between cheating, theft, criminal breach of trust/misappropriation.
There is a very thin line of distinction between theft, cheating, criminal breach of trust. This is because the nature of all these crimes is such that it becomes difficult and sometimes confusing to determine as to an act falls within the ambit of which crime. However, there is some distinction between the above crime which can be described as follows:
- Theft: The intention is to take dishonestly a moveable property out of possession of another person. So the crime relates to the moveable property only.
Criminal misappropriation: The intention is to dishonestly misappropriate or convert to his use of any moveable property.
Cheating: It is fraudulently or dishonestly inducing the deceived person to deliver any property.
- Theft: Moveable property is involved.
Criminal misappropriation: The moveable property is involved.
Cheating: It may be any property.
- Theft: The property is taken out of possession of another person.
Criminal misappropriation: The offender is already in possession of the property.
Cheating: The victim is induced to deliver the property.
It may be noted that like criminal breach of trust and misappropriation, there is wrongful gain or loss in cheating. However, in cheating, dishonest intention starts with the very inception of the transaction and in breach of trust, the person receives property legally but retain or convert it unlawfully.