Author: Mehrul Arora | Featured-Pic Credit: Shashwat Ashiya

Meaning

Section 420 – 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 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 be liable to fine.

Black’s Law Dictionary defines cheating as the “deceitful practices in defrauding or endeavouring to defraud another of his known right, by some willful device, contrary to the plain rules of common honesty.” The primary requirement to make out an offence of cheating u/s. 415 punishable u/s. 420 of the Indian Penal Code (hereinafter referred to as ‘IPC’) is dishonest/fraudulent intention at the time of inducement is made.[1]

INGREDIENTS

In the case of K.L. Agarwal v State of U.P.[2]the Hon’ble Court observed that the essential ingredients of Section 420 are –

  • cheating;
  • dishonest inducement to deliver property or to make, alter or destroy any valuable security or anything which is sealed or signed or is capable of being converted into a valuable security, and
  • mensrea of the accused at the time of making the inducement.
Cheating

Cheating has been defined in Section 415 of the IPCas “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”.”

But, for an offence to fall under Section 420 of IPC, it must be proved that the complainant parted with his property acting on a representation which was false to the knowledge of the accused and that the accused had a dishonest intention from the outset.[3]

In the case of Mahadeo Prasad v. State of Bengal[4], it was held that the offence of cheating is established when the accused thereby induced that person to deliver any property or to do or to omit to do something which he would otherwise not have done or omitted. Further, in the case of Sonbhandra Coke Products v. State of U.P.[5], the Hon’ble Court held that the offence of cheating can be made out only if it has been shown that damage or harm has been caused to the person so deceived.

A cheque was returned unpaid by the bank under the remark “payment stopped by the drawer”. The complainant alleged that the cheque was dishonoured because the drawer of the cheque had no sufficient balance or arrangement. The Court refused to quash the complaint. Issuing a cheque without arrangement of sufficient funds may amount to cheating.[6]

The accused had failed in their attempt is irrelevant in considering whether they had committed the offence of attempting to cheat. This view of the matter has been accepted in the High Courts uniformly[7]. In the Government of Bengal v. UmeshChunderMitter[8], it was observed that “A man may attempt to cheat, although the person he attempts to cheat is forewarned, and is therefore not cheated.”  The accused manufactured certain spurious trinkets and took them to a goldsmith, showed them to him, and said they were of gold (which they were not) and that they were stolen property (which was also untrue). He further said that he did not wish to sell them in the market and asked the goldsmith to buy them. The goldsmith did not buy them and the negotiations went no further. It was held that the accused was guilty of attempt to cheat.[9]

Dishonest inducement to deliver property or to make, alter or destroy any valuable security or anything which is sealed or signed or is capable of being converted into a valuable security.

It is not necessary that a false pretence should be made in express words by the accused. It may be inferred from all the circumstances including the conduct of the accused in obtaining the property. In the true nature of things it is not always possible to prove dishonest intention by any direct evidence. It can be proved by number of circumstances from which a reasonable inference can be drawn[10].

The word ‘property’, occurring in Section 420, IPC, does not necessarily mean that the thing, of which a delivery is dishonestly desired by the–personwho cheats,must have a money value or a market value, inthe hand of the person cheated. Even if the thing has no money value, in the hand of the person cheated, but becomes a thing of value, in the hand of the person, who may get possession of it, as a result of the cheating practised by him, it would still fall within the connotation of the term ‘property’[11]. Thus, a driving license or its duplicate[12] had been held to be property within the meaning of this section. Similarly, an admission card to sit for the examination of a university was also held to be property and the contention that the admission card had no pecuniary value and was, therefore, no property was negatived on the ground that the admission card as such had no pecuniary value but it had immense value to the candidate for the examination. [13].

In the case of Bakhshish Singh Dhaliwal v. State of Punjab[14], it was held that in every case when property is delivered by a person cheated, there must always be a stage when the person makes up his mind to give the property on accepting the false representation made to him. It cannot be said that in such cases the person committing the offence can only be tried for the simple offence cheating u/s. 417 and cannot be tried under this section because the person cheated parts with his property subsequent to making up his mind to do so.

Mensrea of the accused at the time of making the inducement.

Mensrea or a guilty intention is an essential ingredient of the offence of cheating. In other words, ‘mensrea’ on the part of the accused must be established before he can be convicted of an offence of cheating.[15] For the purpose of holding a person guilty u/s 420 of the IPC, the evidence adduced must establish beyond reasonable doubt, mensrea on the part of the accused[16]. Furthermore, there has to be a dishonest intention from the very beginning, which is a sine qua non to hold the accused guilty for commission of the said offence[17].In the case of Mahadeo Prasad v. State of West Bengal[18], it was held that in order to constitute the offence of cheating, the intention to deceive should be in existence at the time when the inducement was offered.It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise, to say that he committed an act of cheating. A mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating.[19]In the case of Hari Prasad Chamaria v. Bishun Kumar Surekha and others[20], it was held that unless the complaint showed that the accused had dishonest or fraudulent intention at the time the complainant parted with the money it would not amount to an offence under Section 420, IPC and it may only amount to breach of contract.

Section 138 of The Negotiable Instruments Act and Section 420 IPC

Even after introduction of Section 138 of the Negotiable Instruments Act, prosecution under Section 420 IPC is maintainable in case of dishonour of cheques or post-dated cheques issued towards payment of price of the goods purchased or hand loan taken, or in discharge of an antecedent debt or towards payment of goods supplied earlier, if the charge sheet contains an allegation that the accused had dishonest intention not to pay even at the time of issuance of cheque, which was dishonoured caused damage to his mind, body or reputation.[21]

In the case of SangeetabenMahendrabhai Patel v. State of Gujarat[22], it was held that prosecution u/s. 138 Negotiable Instruments Act, the mensrea i.e., fraudulent or dishonest intention at the time of issuance of Cheque is not required to be proved. But in a prosecution u/s. 420 IPC the issue of mensrea may be relevant. There may be some overlapping of facts in the cases u/s. 420 IPC and s.138 of Negotiable Instruments Act, but ingredients of offences are entirely different.

CONCLUSION

Thus, Section 415 pertains to cheating in general and the punishment for the same has been given in Section 417 of IPC but Section 420 is an aggravated type of offence involving delivery of a property by dishonestly inducing a person or any alteration or destruction to the whole or any part of a valuable security, and the most essential element of Section 420 is the pre-existence of dishonest or fraudulent intention in the mind of the accused, which has been defined in Section 24 and 25 of the IPC respectively as  ‘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”’ and ‘a person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise’, in order to constitute an offence under this section.


Follow Uus on Facebook and Instagram.


[1]Annamalai v. State of Karnataka, 2011 CrLJ 692 (SC).

[2] Application no. 39907 of 2013, Judgement dated: 25. 05.2016, Allahabad High Court.

[3]Mobarik Ali Ahmed v. The State of Bombay, (1958) SCR 328.

[4] AIR 1954 SC 724.

[5] 1994 CrLJ 657 (All).

[6] Thomas Verghese v. P. Jerome, 1992 CrLJ 3080 (Ker).

[7]BashirbhaiMohamedbhaivs The State of Bombay, 1960 SCR (3) 554.

[8] (1889) ILR 16 Cal 310.

[9] Abdullah, (1914) PR No. 14 of 1914.

[10]ShivanarayanKabra v. State of Madras, AIR (1967) SC 986.

[11]IshwarlalGirdharlal Parekh v. State of Maharashtra And Ors, 1969 (71) Bom LR 52 : AIR 1969 SC 40.

[12] Ram Chander v. State, AIR. 1966 Rajasthan 182.

[13]Abhayanand Mishra v. State of Bihar, (1961) 2 CrLJ 822 SC.

[14] (1967) 1 SCR 211.

[15]JaswantraiManilalAkhaneyvs The State of Bombay, AIR 1954 SC 724; G. V Rao v. L.H. V Prasad and others, 2000 (3) SCC 693.

[16] State of H.P. v. Sidhumal, 2013 CrLJ 1468 (HP).

[17] Joseph Salvaraj v. State of Gujarat, AIR 2011 SC 2258: (2011) 7 SCC 59.

[18]Supra 4.

[19] S.W. Palanitkar and Ors v. State of Bihar and Anr, AIR 2001 SC.

[20] AIR 1974 SC 301.

[21]Sri B.OmprakashvsM.Gangadhar And Another, Criminal Appeal No.833 of 2006 , Judgement dated: 18.04. 2014, Andhra High Court.

[22] AIR 2012 SC 2844.


About the Author: Mehrul is a fourth-year law student at Law College Dehradun, Uttrakhand University.


Disclaimer: Although we try to ensure that the information provided, whether in relation to the products, services, or offering or otherwise provided (hereinafter mentioned as “INFORMATION”) on the website is correct at the time of publishing, we or any third parties do not provide any warranty or guarantee as to the accuracy, timeliness, performance, completeness or suitability of the information and materials found or offered on this website for any particular purpose. It shall be your own responsibility to ensure that any products, services or information available through this website meet your specific requirements. Neither the website nor any person/organization acting on its behalf may accept any legal liability/responsibility.


Terms-and-conditions/ (Click Here)

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s