sec 415 Cheating PDF

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Section 415 in The Indian Penal Code Introduction: Hawkins defines cheating as deceitful practices in defrauding or endeavoring to defraud another of his own right, by means of some artful device, contrary to the plain rule of common honesty. (Smith and Hoogan, Criminal Law 10th edition, 2003 page 568 to 569). Cheating at common law was a misdemeanor and punishable by imprisonment and fine. Cheating is a criminal offence and it has a myriad of crimes associated with it. It can be seen in various forms. In the layman’s language cheating can be described as a dishonest or unfair act done to gain advantage over the other. Cheating is saying or doing something dishonestly which makes someone believe that something is true when it is not. In Hari Sao vs. State of Bihar [AIR 1970 SC 843], it is stated that “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. A willful misrepresentation of a definite fact with intent to defraud constitutes an offence of cheating. Section 415 in the Indian Penal Code defines ‘Cheating’ as: 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”. Explanation.—A dishonest concealment of facts is a deception within the meaning of this section. The term deception means “making a person to believe something which is false” In the case of ‘Abhayanand Mishra vs The State Of Bihar [AIR 1698, 1962 SCR (2) 241]’, the appellant applied to the Patna University, for permission to appear, at the 1954 M. A. Examination in English, as a private candidate, representing, that he was a graduate having obtained his B. A. Degree in 1951 and that he had been teaching in a certain school. Believing his statements to be true, the university authorities gave him the necessary permission. However, it was later found that the appellant was neither a graduate nor a teacher as represented by him. Hence he was prosecuted and convicted of cheating.

Illustrations (a) A, by falsely pretending to be in the Civil Service, intentionally deceives Z, and thus dishonestly induces Z to let him have on credit goods for which he does not mean to pay. A cheats. (b) A, by putting a counterfeit mark on an article, intentionally deceives Z into a belief that this article was made by a certain celebrated manufacturer, and thus dishonestly induces Z to buy and pay for the article. A cheats. (c) A, by exhibiting to Z a false sample of an article, intentionally deceives Z into believing that the article corresponds with the sample, and thereby, dishonestly induces Z to buy and pay for the article. A cheats. (d) A, by tendering in payment for an article a bill on a house with which A keeps no money, and by which A expects that the bill will be dishonored, intentionally deceives Z, and thereby dishonestly induces Z to deliver the article, intending not to pay for it. A cheats. (e) A, by pledging as diamonds article which he knows are not diamonds, intentionally deceives Z, and thereby dishonestly induces Z to lend money. A cheats. (f) 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. (g) A intentionally deceives Z into a belief that A means to deliver to Z a certain quantity of indigo plant which he does not intend to deliver, and thereby dishonestly induces Z to advance money upon the faith of such delivery. A cheats; but if A, at the time of obtaining 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 only to a civil action for breach of contract. (h) A intentionally deceives Z into a belief that A has performed A’s part of a contract made with Z, which he has not performed, and thereby dishonestly induces Z to pay money. A cheats. (i) A sells and conveys an estate to B. A, knowing that in consequence of such sale he has no right to the property, sells or mortgages the same to Z, without disclosing the fact of the previous sale and conveyance to B, and receives the purchase or mortgage money from Z. A cheats. Ingredients for cheating 1. Deception by any person 2. (a) Fraudulently or dishonestly inducing that person(i) To deliver any property to any person (ii) To consent that any person will retain 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 in body, mind, reputation or property 3. Delivery of any property to any person The Hon’ble Supreme Court in Ramdas vs. State of UP, [1971]2 S.C.J. 264 analysed the ingredients of offence of cheating as under: (i) (ii)

(iii)

There should be fraudulent or dishonest inducement of a person by deceiving him (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 induced to do or omit to do anything which he would not do or omit if he were not so deceived; and In cases covered by ii (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.

Explanation to the section says that a dishonest concealment of facts is a deception within the meaning of this section. Constituents of Cheating: Acting Dishonestly: The term ‘dishonestly’ has been defined under section 24 of Indian Penal Code. It is defined as, “when the doing of any act or not doing of any act causes wrongful gain of property to one person or a wrongful loss of property to a person, the said act is done dishonestly.” A person can be said to have done a thing dishonestly when he does so with the intention of causing wrongful gain to one person or wrongful loss to another person. Wrongful gain occurs when a person who is not entitled to property acquired it through unlawful means conversely, wrongful loss is loss of property sustained by a person through unlawful means. There is no requirement in law to establish both wrongful gain and wrongful loss. It is sufficient to establish the existence of any one of them. Fraudulently: Being fraudulent involves deception mainly criminal deception. It is characterized by fraud. According to section 25 “a person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise.” Property : Property has a much wider meaning. It is not necessary that property must have money value or a market value in the hands of the person cheated, but once it is induced to be parted and it becomes a thing of value in the hands of the person who may get possession of it as a result of cheating, it would fulfill the requirements. Property may be movable or immovable. A passport, an admission card to an examination, title deeds, salary of a person, health certificate, etc., are deemed as property for the purpose of Section 415. ( RK Dalmia vs Delhi administration AIR 1962 SC 1821) Mens Rea: Mens rea is the intention or action to constitute a crime. It is a mental state of an offender while committing a crime. Mens rea is one of the essential ingredients of the offence of

cheating under Section 415 IPC and where mens rea is not established no offence of cheating can be made out. The Supreme Court in Inder Mohan Goswami and anr vs. State of Uttaranchal [AIR 2008 SC 251] reiterated that intention is an essential ingredient of the offence of cheating under Section 415. Therefore it has to be shown beyond doubt that the accused had a fraudulent or dishonest intention at the time of making a promise. From the mere fact that the promisor could not keep his promise, it cannot be presumed that he all along had a culpable intention to break the promise from the very beginning The person deceived may also be intentionally induced to do or to omit to do anything which he would not have done, if not deceived, and which act of his caused or was likely to cause damage or harm in body, mind, reputation or property. Active participation in crime: It has to be proved beyond any doubt that the accused has actively contributed in a crime and that crime has affected another person’s property. The complainant has to show that at the time the alleged false representation was made or the inducement offered by the accused, the accused had no intention of honouring the same. Otherwise, the entire transaction would only be civil in nature. However, if the accused had no intention whatsoever to pay, but merely said that he would do so in order to induce the complainant to part with the goods, then a case of cheating could be established. False pretence need not be in expressed in words for constituting offence of cheating. It can be inferred from all the circumstances, including the conduct of the accused. Deception: Section 415 has two parts; in the first part, inducement must be dishonest or fraudulent, and in the second part, inducement should be intentional. ‘Deception’ is common element in both the parts. One of the initial ingredients which have to be proved to establish the offence of cheating is deception, which must precede and thereby induce the other person to either (a) deliver or retain property; or (b) To commit the act or omission defined to in the second part of Section 415. It is, however, not necessary that deception should be expressed in words but it may be inferred by conduct or implied in the nature of transaction itself. 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 word or by conduct. A fraudulent representation can be made directly or indirectly. A willful misrepresentation of a definite fact with intent to defraud constitutes an offence of cheating. It is not sufficient to prove that a false representation had been made but it must be proved that the representation was false to the knowledge of the accused and was made to deceive the complainant. Where a person knows that statements made by another are false, but still acts upon them with a view to entrap that person, the accused will be guilty of offence under this section.

By virtue of explanation to Section 415, a dishonest concealment of facts is tantamount to deception. Not all concealment of material facts but dishonest concealment of facts amounts to deception. It does not necessarily deal with illegal concealment of facts but with dishonesty even in the absence of legal obligation or duty to speak. Where there is willful representation with intent to defraud, it has been considered to amount to cheating. To establish offence, what is important is to see whether the misrepresentation was false to the knowledge of the accused at the time when it was made. To constitute the offence of cheating it is not necessary that the act which the person deceived is induced to do should actually cause harm to him. It is enough that the act which the person deceived has been induced to person deceived is likely to cause damage or harm to him. 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. Section 415 clearly shows that mere deceit is not sufficient to prove the offence. Likewise, committing something fraudulently or dishonestly is also not sufficient. 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. Illustration: A calls at the houses of a number of people and contracts with them to make paintings from photographs. He obtained payments in advance but did not make any paintings and it appeared that he never had any intention of making any paintings. A is guilty of cheating as he deceived them all by inducing them to make advance payments. The Hon’ble Supreme Court in the case of Rajesh Bajaj vs State Nct Of Delhi And Others (AIR 1999 SC 1216) observed, After quoting Section 415 of IPC learned judges proceeded to consider the main elements of the offence in the following lines: "A bare reading of the definition of cheating would suggest that there are two elements thereof, namely, deception and dishonest intention to do or omit to do something. In order to bring a case within the first part of Section 415, it is essential, in the first place, that the person, who delivers the property should have been deceived before he makes the delivery; and in the second place that he should have been induced to do so fraudulently or dishonestly. Where property is fraudulently or dishonestly obtained, Section 415 would bring the said act within the ambit of cheating provided the property is to be obtained by deception." Further, the Apex court held that ‘the crux of the postulate is the intention of the person who induces the victim of his representation and not the nature of the transaction which would become decisive in discerning whether there was the commission of an offence or not’.

Punishment for cheating Section 417: Punishment for cheating- Whoever cheats shall be punished with imprisonment of either description for a term which may extend to one year or fine or with both. This section punishes simple cheating. Where A dines at a hotel and goes away without paying bill is liable for cheating under this section. Cheating is punishable under this section with imprisonment up to 1 year or fine or both. Imprisonment depends upon the quantum of the act done. If the act is not that grave, imprisonment won’t be imposed and will charge with fine only. Section 418: Cheating with knowledge that wrongful loss may ensue to person whose interest offender is bound to protect. Under this section, “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 found, 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”. Explanation: Causing loss to the aggrieved party whose interest is to be protected by the offender, omits to do so with wrongful intention. Section 419: Punishment for cheating by personation. Under this section, “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 420: Cheating and dishonestly inducing delivery of property This section deals with offences which are committed by a person by cheating another person and inducing him to deliver his property to the offender. According to this section “Whoever cheats and thereby dishonestly induces the person deceived 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”. Some modes of cheating There are various ways through which the offence of cheating can be committed. For example:  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.  Deception and Cheating by false promise of marriage: Duping young girls and inducing them to consent to sexual intercourse on a false promise of marriage has become common form of deception in recent times. The act amounts to cheating if it is proved that the promise to marry by the accused to induce the victim girl to have sexual intercourse with him was false when it was made by him.

In the case of Badi Chinna Rao vs. State of Andhra Pradesh, the accused fraudulently induced the victim to have sexual intercourse with him on a false promise of marriage. When she got pregnant, he tried to get her to abort the baby. The High Court of Andhra Pradesh held that the conduct of the accused clearly showed that he had no intention of marrying the victim, but was sexually exploiting her by deceitful means. He was therefore convicted under Section 415 and 417 of IPC. Difference between Cheating and Breach of Contract Cheating It is mentioned u/s 415 to 420 of Indian Penal Code, 1860. It is dealt under criminal law. It is a dishonest act done in order to gain advantage over the other. Intention to deceive exists at the time when inducement is made. In the beginning, only the person must have fraudulent intention regarding the promise to constitute it as an offence of cheating.

Breach of Contract It is mentioned u/s 73 of Indian Contract Act, 1872. It is dealt under civil law. It is a cause of action which occurs when the binding agreement is not performed. Intention does not exist from the beginning of the contract. The breach is done due to some reasons at the time when it is to be executed

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 Difference between Cheating and Fraud Cheating It is mentioned u/s 415 to 420 of Indian Penal Code, 1860.

It is a dishonest act done in order to gain advantage over the other. In order to maintain suit for cheating there are two situations which are necessary subscribed in section 415 i.e. deception and inducement. Cheating is not limited only to

Fraud Implications of fraud are mentioned in section 421, 422, 423, 424 of Indian Penal Code, 1860. It is a deliberate deception to secure unfair advantage over of the other. It is done to gain by another’s loss. In order to maintain the suit for fraud intention to deceive is sufficient. Fraud basically relates more to

contracts.

contracts.

Dishonour of Cheque and Cheating Dishonour of Cheque is maintained u/s 138 of Negotiable Instrument Act while the offence of Cheating is mentioned u/s 415 to 420 of Indian Penal Code. But in some cases dishonor of Cheque can be taken as an offence of cheating. For example, if the person who has issued the cheque has already closed his bank account but still issues a cheque to some other person in exchange of payment of goods he has purchased from that person, in this case the person issuing the cheque is dishonest as he is aware of the fact that the cheque will get bounce. The person has deceived the other by doing so ...