Cheating

12-Sep-2023

Introduction

Cheating is considered as a criminal offence under the Indian Penal Code, 1860 (IPC). It is done in order to gain profit or an advantage from another person by using some deceitful means.
Section 415 states that 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".

Illustrations

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 has committed the offence of cheating under Indian Penal Code, 1860 (IPC).
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 has committed the offence of cheating under Indian Penal Code, 1860 (IPC).

Essentials of Cheating

Section 415 has two alternate parts, in the very first part the person must ‘dishonestly’ or ‘fraudulently’ induce the complainant to deliver any property while in the second part, the person should intentionally induce the complainant (the person so deceived) to do or omit to do a thing.
The main essential of Section 415 which have to be proved to obtain conviction for cheating are as follows:
For the First Part
- The accused deceived some person.
- By deception, he induced that person.
- The above inducement was fraudulent and dishonest.
- The person so induced delivered some property to or consented to the retention of some property by any person.
For the Second Part
- The accused deceived some person.
- Such inducement was intentional.
- The person so induced did or omitted to do something.
- Such an act or omission caused or was likely to cause damage or harm to the person induced in body, mind, reputation or property.

Deception

A person deceives another when he causes one to believe what is false or misleading as a matter of fact or leads to error. Deception is a necessary ingredient for the offences of cheating under both parts of the section.
To constitute the offence of cheating ‘deception’ must precede and thereby induce the other person to either;
- Deliver or retain property.
- To commit the act or omission.
Whenever a person fraudulently represents as an existing fact that which is not an existing fact, he commits an offence of cheating. What actually constitutes deception is a matter of evidence in each case depending upon the facts and circumstances.
- Where there is no evidence of deception then the offence of cheating should not be established.

Willful Representation and Cheating

Where there is willful misrepresentation with intent to defraud, it will amount to cheating. However, it is important to see that when the misrepresentation was made it was false to the knowledge of the accused.

Dishonest Intention

To hold a person guilty of cheating, it is necessary to show that he had fraudulent or dishonest intentions at the time of making the promise.

Inducement

The person cheated must have been intentionally induced to do an act which he would have done due to the deception caused to him. 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).

Cheating by Personation

Section 416 of the code states that, a person is said to "cheat by personation" if he cheats by pretending to be 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 other person really is.

Illustrations

‘A’ cheats by pretending to be a certain rich banker of the same name. ‘A’ cheats by personation.
‘A’ cheats by pretending to be B, a person who is deceased. ‘A’ cheats by personation.

Punishment for Cheating

Section 417 states that whoever cheats shall be punished with imprisonment of either description for a term which may extend to one year, or with fine, or with both.

Cheating in Fiduciary Relationship

Section 418 states that Cheating with the knowledge that wrongful loss may ensue to person whose interest offender is bound to protect.
It prescribes the punishment for cheating by a person standing in a fiduciary capacity to the person who cheated.
Such a relationship exists between a banker and a customer, the principal and an agent, guardian and the ward, director of a company and a shareholder, a solicitor and a client, etc.

Punishment for Cheating by Personation

Section 419 of the code states that 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.

Cheating and Dishonestly Inducing Delivery of Property

Section 420 deals with certain aggravated forms or specified classes of cheating. It deals with cases of cheating, whereby, the deceived person is dishonestly induced;

To deliver any property to any person.
To make, alter or destroy;
- The whole or any part of a valuable security.
- Anything which is signed or sealed, and which is capable of being converted into a valuable security.

It is required to prove that the complainant has parted with the property due to dishonest inducement of the accused. The property so delivered must have some money value to the person cheated.

The maximum punishment which can be awarded under this section is imprisonment for a term of 7 years and a fine.

Case Laws

Shri Bhagwan Samardha Sreepadha Vallabha Venkata Vishwanandha Maharaj v. State of Andhra Pradesh (1999):
- The Supreme Court held that the representation made by the accused in an appeal that he had divine healing powers through his touches, thereby making the complainant believe that he could cure his little girl of her congenital dumbness through his divine powers was fraudulent and amounted to inducement.
- Thus, believing the promises, the complainant was induced to believe in the divine powers and shell out money to the so-called Godman.
Abhayananda Mishra v. State of Bihar, (1961):
- The Supreme Court held that a passport is a document by which its very nature and purpose is a political document for the benefit of its holder.
- It recognizes him as a citizen of the country granting it and in the nature of request to order another country to allow his free passage there.
- There can therefore be no doubt that a passport is a document of importance for travel abroad and is of considerable value to its holder, thus looking to the importance and characteristics of a passport it can be said that it is a property within the meaning of sections 415 and 420 of IPC.
Baboo Khan v. State of Uttar Pradesh (1961):
- The Allahabad HC held that the accused, who pretended to be a certain well-known eye specialist and encouraged the claimant to agree to him to carry out a procedure on the eye of his 12-year-old son, was found guilty under section 416 of Indian Penal Code, IPC.

Conclusion

‘Cheating’ is an offence under IPC in which a person induces the other by deceiving the person to do any act or to omit to do an act. The intention of the accused plays an important part and is taken into consideration while deciding his liability.

The two main elements that have to be considered to constitute the offence is deception and inducement. The intention to cheat on part of the accused at the time of making a false representation needs to be proved. It must be shown that a promise was made by the accused and he failed to keep the promise and further, no effort was put in by him in order to keep the promise.