Section 318 of BNS

Source: Supreme Court  

Why in News? 

Recently, the bench of Justice MM Sundresh and Justice Rajesh Bindal quashed a cheating case against the head of an educational institute accused of using a fake Fire Department NOC for affiliation. The Court held that since buildings below 15 metres do not require such NOC, there was no dishonest inducement or wrongful gain, and thus the offence of cheating was not made out. 

• The Supreme Court held this in the matter of Jupally Lakshmikantha Reddy v. State of Andhra Pradesh & Anr. (2025). 

What was the Background of Jupally Lakshmikantha Reddy v. State of Andhra Pradesh & Anr. (2025) Case? 

• Jupally Lakshmikantha Reddy was the head of JVRR Education Society, which operated a college since 2016 in a non-multistoried building with a height of 14.20 metres. 
• On 13 July 2018, V. Sreenivasa Reddy, District Fire Officer of Kurnool, filed a written complaint alleging that the college had obtained recognition from the School Education Department by submitting a forged No-Objection Certificate (NOC) purportedly issued by the Assistant District Fire Officer, Kurnool. 
• Based on this complaint, an FIR was registered on 15 July 2018 under Sections 420, 465, 468, and 471 of the Indian Penal Code for alleged cheating and forgery. 
• During investigation, police found that the District Fire Officer had not issued the NOC in question, and only a xerox copy of the alleged Fire NOC was submitted to the State Council of Educational Research and Training (SCERT) for obtaining recognition. 
• Despite investigation efforts, the original allegedly fabricated document could not be recovered by the police. 
• Under the National Building Code of India, 2016, fire safety NOCs are not required for educational buildings below 15 metres in height, and the appellant's building was only 14.20 metres tall. 
• Prior to the criminal case, the appellant's society had filed writ proceedings (WP No. 14542/2018) before the High Court seeking renewal of affiliation without requiring fire NOC from the State Disaster Response and Fire Services Department. 
• The High Court allowed the writ petition on 25 April 2018 and directed the Education Department to renew affiliations without insisting on fire NOCs for buildings below the prescribed height. 
• When the Education Department failed to comply with the court's direction, contempt proceedings were initiated against both the Education and Fire Departments. 
• The appellant contended that the criminal case was registered as a counterblast to intimidate and harass him following the successful writ petition. 

What were the Court’s Observations? 

• The Supreme Court examined the essential ingredients of cheating under Section 420 IPC, requiring deception through false representation and fraudulent or dishonest inducement causing the victim to act differently. 
• The Court emphasized that mere deception alone does not constitute cheating unless dishonest inducement is established, requiring deliberate intention to cause wrongful gain or loss. 
• The Court found that dishonest inducement was absent since the appellant was legally entitled to recognition without an NOC, resulting in no wrongful gain or loss to either party. 
• The alleged deception was immaterial to the grant of recognition because Fire Department NOCs were not necessary for educational buildings below 15 metres height, as confirmed by uncontroverted evidence and the writ court's order. 
• The Court held that penal consequences require proof that false representation was of a material fact which induced the victim to act differently - this vital link was missing in the present case. 
• Regarding forgery charges, the Court found no evidence that the appellant manufactured the alleged fake document, which is essential for Section 465 IPC, and the original document was never recovered. 
• Offences under Sections 468 and 471 IPC were not attracted as the requisite mens rea was not demonstrated, since recognition was not dependent on the alleged forged NOC. 
• The Court concluded that the High Court failed to consider these legal issues and that the allegations did not disclose essential ingredients of cheating or forgery offences, leading to quashing of the criminal proceedings. 

What is Section 318 of Bhartiya Nyaya Sanhita,2023? 

• Previously this section was covered under Section 420 of Indian Penal Code,1860. 
• Section 318 defines cheating as an offence committed when a person, through deception, fraudulently or dishonestly induces another person to act in a manner detrimental to their interests. 
• The provision establishes two distinct modes of cheating: first, where the deceived person is induced to deliver property or consent to its retention by another; and second, where the deceived person is intentionally induced to do or omit any act they would not have done but for the deception. 
• The essential elements of cheating under this section include:  
  • (a) deception of a person,  
  • (b) fraudulent or dishonest inducement in case of property delivery, or intentional inducement in case of acts or omissions,  
  • (c) the deceived person acting in a manner they would not have acted without the deception, and  
  • (d) such act or omission causing or being likely to cause damage or harm to the deceived person's body, mind, reputation, or property. 
• The section recognizes that deception can occur not only through active misrepresentation but also through dishonest concealment of material facts, as clarified in the Explanation clause. 
• For the first category involving property, the inducement must be either fraudulent or dishonest, requiring intention to cause wrongful gain to one person or wrongful loss to another. 
• For the second category involving acts or omissions, the inducement need only be intentional, though the resulting act or omission must cause or be likely to cause harm to the deceived person. 
• The provision emphasizes the causal link between the deception and the harmful consequence, requiring that the deceived person's action or inaction must be directly attributable to the deceptive conduct. 
• The harm envisaged under this section is comprehensive, covering physical injury, mental distress, reputational damage, or financial loss to the victim of the deceptive practice.