Section 318 of BNS - (1) Whoever, be 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.
Illustration
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 on 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 dishonoured, 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 articles which he known 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 advnce 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 actio 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.
(2) Whoever cheats shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.
(3) 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 related, 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 five years, or with fine or with both.
(4) 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 pert 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 - 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.
Section 25: Fraudulently - A person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise.
Section 24: Dishonestly - Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing "dishonestly".
Section 23: "Wrongful gain" - "Wrongful gain" is gain by unlawful means of property to which the person gaining is not legally entitled.
Wrongful loss - "Wrongful loss" is the loss by unlawful means of property to which the person losing it is legally entitled.
Gaining wrongfully/ Losing wrongfully - A person is said to gain wrongfully when such person retains wrongfully, as well as when such person acquires wrongfully. A person is said to lose wrongfully when such person is wrongfully kept out of any property, as well as when such person is wrongfully deprived of property.
A person is said to cheat when he by deceiving another person fradulently 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.
Ingredients - This section requires -
1. Deception of any person.
2. (a) Fraudulently or dishonestly inducing that person -
(i) to deliver any property to any person; or
(ii) to consent that any person shall 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.
The Supreme Court has in Ram Das v. State of U.P., analysed the ingredients of offence of cheating as under :-
(i) There should be fraudulent or dishonest inducement of a person by deceiving him;
(ii) (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 anyting 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.
The essence of an offence of cheating is that damage or harm caused by deception must be proved in relation to the person caused by deception must be proved in relation to the person deceived. But in transaction of commercial nature the breach of promises which may resultantly yield loss may not necessarily fall within the ambit of cheating.
The cheating is to take place in relation to the delivery of property. It is not necessary that the property must have a money value or a market value in the hands of the person cheated, but once it is induced to be parted with 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. Thus a passport would be a property within the meaning of Section 415 and 420 for it has the characteristics and importance of being a property as envisaged in these sections.
1. Deceiving any person - A person deceives another when he causes to believe what is false or misleading as to a matter of fact, or leads into error. A wilful 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 the accused misrepresented the Public Service Commission as to his age and qualification, he was found guilty under this section. It was held that although the commission was an independent statutory body performing advisory function, the deception of such advisory body was deception of the Government and the accused was liable under this section.
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 attempt to commit this offence.
2. Fraudulently or dishonestly induces the person so deceived to deliver any property - The essence of charge under this section is that the accused induces someone fraudulently or dishonestly. The dishonest intention must either proceed or accompany the act of dishonesty. Recommendation of a person's worthiness is not tantamount to false representation resulting in inducement. A representation must have been made it to be false resulting in wrongful loss or wrongful gain.
The Supreme Court in Inder Mohan Goswami & Another v. State of Uttranchal, 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 promise. From the mere fact that 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.
3. Intentionally inducing that person to do or omit to do anything which he would not do or omit, etc - The person cheated must have been intentionally induced to do an act which he would not have done or omit to do an act which he would have done due to the deception caused on him.
In Jibrial Diwan v. State of Maharastra, two letters of invitation were prepared by one Mr. Patel on the letterhead of Minister to attend a cultural show. The letter was not signed by the Minister. The invitation letter prepared by Mr. Patel was delivered to the two invitees by the appellant. Mr Patel was acquitted by the High Court but the appellant was convicted and hence he preferred an appeal to the Supreme Court. It was held that the appellant was not guilty under Section 417 of I.P.C as the act did not cause or was likely to cause harm to any person in body, mind or reputation.
In Rajesh Bajaj v. State NCT of Delhi, The appellant/complainant belongs to a company M/s Passion Apparel Private Ltd engaged in manufacture and export of ready made garments. One Gagan Kishore fifth respondent the Managing Director of M/s Avren Junge Mode Gumbh Hans Der model approached the complainant for purchase of ready made garments and induced the appellant to believe that he would pay the price of goods on receipt of invoice within fifteen days from the date of invoice which complainant would despatch to Germany. The appellant on belief of the representation despatched the goods worth 4,46,597.25 D.M. In March/April, 1995 respondent on receipt of 37 different invoices got the goods released and sold them to others. But the respondent paid only a sum of 1,15,194 D.M. It was alleged that the respondent induced the appellant to believe that he was a genuine dealer, but actually his intentions were not clear. The respondent did not honour even a subsequent understanding reached between the two parties that respondent would pay 20,000 D.M. in lieu of remaining part of price but even that was not honoured. The High Court quashed the FIRon the ground that the offence under Section 420, IPC was not made out and also that in the face of the allegations made "it is purely a commercial transaction which in a nutshell is that the buyer did not pay the balance amount of the goods as per his assurance. An appeal was preferred to the SC against this order. It was held that it may be that the facts narrated in the complaint would as well reveal a commercial transaction or money transaction. But that is hardly a reason for holding that the offence of cheating would elude from such transaction. In fact many cheatings were committed in the course of commercial and also money transactions. The crux of the postulate is the intention of the person who induces the victim of his representation and not the nature of transaction which would become decisive in discerning whether there was commission of offence or not. The complainant in this case has stated in the body of the complainant that he was induced to believe that the respondent would honour payment on receipt of invoices, and that the complainant realised later that the intentions of respondent were not clear. He also mentioned that respondent after receiving the goods have sold them to others and still he did not pay the money. Such averments would make a case for investigation by the authorities.
Deception and Cheating by false promise of marriage
Duping young girls and inducing them to consent to sexual intercourse or a false promise of marriage has become a 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 Sudhanshu Shekhar Samantry v. State of Orissa, the accused sexually exploited the prosecutrix and in order to assure of marriage with her, put vermilion on her mang acknowledging her as his wife but promised to publicly accept her after he gets a job. But later he refused to accept her as his wife. He was held guilty of offence deceiving and cheating under Section 493/417 of IPC.
Section 417: Punishment for cheating - Whoever cheats shall be punished with imprisonmment of either description for a term which may extend to one year, or with fine, or with both.
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