Section 318 carries forward the offence of cheating and cheating with delivery of property (old IPC ss. 415-420).
Ram Jas v. State of U.P.
- Case
- Criminal Appeal No. 113 of 1967
- Bench
- Vishishtha Bhargava, I.D. Dua (judgment by Vishishtha Bhargava, J.)
- Provisions
- Indian Penal Code, 1860, s. 415 (cheating) and s. 419 (punishment for cheating by personation) (now Bharatiya Nyaya Sanhita, 2023, s. 318(1) and s. 319)
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Headnote
Cheating · IPC s. 415 (BNS s. 318(1)) · Ingredients of cheating · Damage or harm to the person deceived
The case, in the Court's words
In recording this finding and conviction, the High Court lost sight of the fact that no such charge was framed against the appellant in the trial court. [SCR p. 180]
Held
- The ingredients required to constitute the offence of cheating are :-- (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 anything which he would not do or omit if he were not so deceived; and (iii) 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. [SCR p. 181]
- That act done by the Oath Commissioner of attesting the affidavit could not, however, possibly cause any damage or harm to the Oath Commissioner in body, mind, reputation or property. The Oath Commissioner was obviously not induced to deliver any property to anybody by this wrong identification, nor was he induced to consent that any person should retain any property. Thus, the facts found did not constitute the offence of cheating at all. [SCR p. 182]
- The conviction for an offence under section 419, substantively or with the aid of section 109, I.P.C., could only have been justified if the facts proved constituted all the ingredients of the offence of cheating. [SCR p. 182]
- Further, in recording this conviction, the High Court did not even care to examine in detail whether all the ingredients of the offence had been established by the prosecution evidence. [SCR p. 181]
Result
In these circumstances, the appeal is allowed, the conviction under section 419 read with section 109 of the Indian Penal Code is set aside. [SCR p. 183]
Editorial note: subsequent treatment
The ingredients of cheating set out in this judgment were reproduced as the settled statement of the law in V.P. Shrivastava v. Indian Explosives Ltd. (2010) and in Tilak Raj v. State of Himachal Pradesh (2016).
Indian Oil Corporation v. NEPC India Ltd.
- Case
- Criminal Appeal No. 834 of 2002 (with Criminal Appeal No. 833 of 2002)
- Bench
- H.K. Sema, R.V. Raveendran (judgment by R.V. Raveendran, J.)
- Provisions
- Indian Penal Code, 1860, s. 415 (cheating), s. 417 and s. 420 (cheating and dishonestly inducing delivery of property) (now Bharatiya Nyaya Sanhita, 2023, s. 318(1), s. 318(2) and s. 318(4))
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Headnote
Cheating · IPC s. 415 (BNS s. 318(1)) · Civil remedy and criminal complaint · Quashing of complaint, CrPC s. 482 · Dishonest intention at the time of promise
The case, in the Court's words
Whether existence or availment of civil remedy in respect of disputes arising from breach of contract, bars remedy under criminal law? [para 8]
Held
- A given set of facts may make out : (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceedings are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not. [para 9]
- Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure [...] criminal prosecution should be deprecated and discouraged. [para 10]
- The essential ingredients of the offence of 'cheating' are : (i) deception of a person either by making a false or misleading representation or by other action or omission (ii) fraudulent or dishonest inducement of that person to either deliver any property or to consent to the retention thereof by any person or to intentionally induce 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. [para 25]
- The High Court has relied on several decisions of this Court wherein this Court has held that dishonest intent at the time of making the promise/inducement is necessary, in addition to the subsequent failure to fulfil the promise. [para 26]
- All that is to be seen is whether the necessary allegations exist in the complaint to bring the case within section 415. We are clearly of the view that the allegations in the complaint constitute such an offence. We are not concerned with the proof of such allegations or ultimate outcome of trial at this stage. [para 29]
Result
We accordingly allow these appeals in part and set aside the order of the High Court insofar it quashes the complaint under sections 415 and 425. [para 31]
Editorial note: subsequent treatment
The passage on civil remedy and criminal liability (para 9) was referred to in Priti Saraf v. State of NCT of Delhi (2021), Mitesh Kumar J. Sha v. State of Karnataka (2021) and Vijay Kumar Ghai v. State of West Bengal (2022). The appeals were allowed in part: the complaint was held to disclose cheating and mischief but not theft, dishonest misappropriation or criminal breach of trust.
M.N.G. Bharateesh Reddy v. Ramesh Ranganathan
- Case
- Criminal Appeal No. 1273 of 2022 (arising out of SLP (Crl) No. 9509 of 2019)
- Bench
- Dhananjaya Y. Chandrachud, A.S. Bopanna (judgment by Dr Dhananjaya Y. Chandrachud, J.)
- Provisions
- Indian Penal Code, 1860, s. 415 (cheating), s. 417 and s. 420 (cheating and dishonestly inducing delivery of property) (now Bharatiya Nyaya Sanhita, 2023, s. 318(1), s. 318(2) and s. 318(4))
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Headnote
Cheating · IPC s. 415 and s. 420 (BNS s. 318) · Ingredients of cheating · Breach of a consultancy agreement · Cognizance on a private complaint
The case, in the Court's words
The issue which presents itself for determination in these proceedings is whether the ingredients of the offences of cheating and criminal breach of trust have been made out on the face of the complaint. [para 10]
Held
- The ingredients of the offence under Section 415 emerge from a textual reading. Firstly, to constitute cheating, a person must deceive another. Secondly, by doing so the former must induce the person so deceived to (i) deliver any property to any person; or (ii) to consent that any person shall retain any property; or (iii) intentionally induce 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 such an act or omission must cause or be likely to cause damage or harm to that person in body, mind, reputation or property. [para 14]
- a two-judge bench of this Court interpreted sections 415 and 420 of IPC to hold that fraudulent or dishonest intention is a precondition to constitute the offence of cheating. [para 16]
- At the most, the allegations allude to a breach of terms of the Consultancy Agreement by the Appellant, which is essentially in the nature of a civil dispute. [para 18]
- The allegations in the complaint are conspicuous by the absence of any reference to the practice of any deception or dishonest intention on behalf of the Appellant. Likewise, there is no allegation that the complainant was as a consequence induced to deliver any property or to consent that any person shall retain any property or that he was deceived to do or omit to do anything which he would have not done or omitted to do if he was not so deceived. [para 19]
Result
We accordingly allow the appeal and set aside the impugned judgment and order of the High Court dated 12 July 2019. [para 25]
Editorial note: subsequent treatment
The judgment itself relies on Hridaya Ranjan Prasad Verma (2000) and Dalip Kaur v. Jagnar Singh (2009).
Delhi Race Club (1940) Ltd. v. State of Uttar Pradesh
- Case
- Criminal Appeal No. 3114 of 2024
- Bench
- J.B. Pardiwala, Manoj Misra (judgment by J.B. Pardiwala, J.)
- Provisions
- Indian Penal Code, 1860, s. 415 (cheating), s. 417 and s. 420 (cheating and dishonestly inducing delivery of property) (now Bharatiya Nyaya Sanhita, 2023, s. 318(1), s. 318(2) and s. 318(4)); Indian Penal Code, 1860, s. 405 and s. 406 (now Bharatiya Nyaya Sanhita, 2023, s. 316)
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Headnote
Cheating · IPC s. 420 (BNS s. 318(4)) · Cheating and criminal breach of trust distinguished · Unpaid price of goods · Dishonest intention from inception
The case, in the Court's words
This appeal arises from the order passed by the High Court of Judicature at Allahabad dated 03.04.2024 in Application No. 15453 of 2023 filed by the appellant herein by which, the High Court rejected the same and thereby declined to quash and set aside the summoning order dated 28.02.2023 passed by the Additional Chief Judicial Magistrate, Khurja, Bulandshahar in Complaint Case No. 547 of 2021. [para 1]
Held
- 1) deception of any person, either by making a false or misleading representation or by other action or by omission; 2) fraudulently or dishonestly inducing any person to deliver any property, or 3) the consent that any persons shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit [para 25]
- Further, in both the aforesaid sections, mens rea i.e. intention to defraud or the dishonest intention must be present, and in the case of cheating it must be there from the very beginning or inception. [para 26]
- In case of cheating, the intention of the accused at the time of inducement should be looked into which may be judged by a subsequent conduct, but for this, the subsequent conduct is not the sole test. Mere breach of contract cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the [...] transaction i.e. the time when the offence is said to have been committed. Therefore, it is this intention, which is the gist of the offence. [para 30]
- Although the offence, i.e. the offence of breach of trust and cheating involve dishonest intention, yet they are mutually exclusive and different in basic concept. There is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making a false or misleading representation i.e., since inception. [...] In such a situation, both the offences cannot co-exist simultaneously. [para 30]
- When dealing with a private complaint, the law enjoins upon the magistrate a duty to meticulously examine the contents of the complaint so as to determine whether the offence of cheating or criminal breach of trust as the case may be is made out from the averments made in the complaint. [para 42]
Result
In view of the aforesaid, the appeal succeeds and is hereby allowed. [para 44]
Editorial note: subsequent treatment
The passage on the distinction between criminal breach of trust and cheating was reproduced in V.D. Raveesha v. State of Karnataka (2024) and cited with the inception test in Manish v. State of Maharashtra (2025).
Manish v. State of Maharashtra
- Case
- Criminal Appeal arising out of SLP (Criminal) No. 10931 of 2022
- Bench
- Pamidighantam Sri Narasimha, Joymalya Bagchi (judgment by Joymalya Bagchi, J.)
- Provisions
- Indian Penal Code, 1860, s. 415 (cheating), s. 417 and s. 420 (cheating and dishonestly inducing delivery of property) (now Bharatiya Nyaya Sanhita, 2023, s. 318(1), s. 318(2) and s. 318(4))
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Headnote
Cheating · IPC s. 420 (BNS s. 318(4)) · Unpaid price of goods supplied on credit · Dishonest representation at inception · Quashing of charge-sheet
The case, in the Court's words
between 20th November, 2015 and 02nd June, 2017, the 2nd non-applicant sold coal to the appellant and raised invoices, which carried a credit period of 15 days. [para 3]
Held
- There is no cavil that in some cases a commercial dispute may give rise to a criminal offence in addition to a civil cause of action. The test to determine whether a case would attract penal consequences is as follows:- [...] Did the offending party make dishonest representation at the inception of the transaction and induce the other [...] party to part with property, or act in a manner which but for such representation, the latter would not have [para 14]
- the representation of the appellant that he was a creditworthy businessman cannot be labelled as 'deception' merely on the ground that the appellant had failed to honour the terms of the subsequent agreement. [para 17]
- This reasoning is wholly fallacious. Mere breach of promise to repay per se does not infer dishonest intention [para 17]
- In order to attract the penal provision, the uncontroverted allegations including material collected during investigation must disclose that pursuant to the assurance in the subsequent agreement, the 2nd non applicant had parted with property, that is to say made further supplies and suffered [para 18]
- Failure to pay due to unfortunate business losses cannot be clothed with culpability and the process of criminal law utilized to recover outstanding dues [para 19]
Result
For the aforesaid reasons, the impugned order is set aside and the proceeding arising out of FIR No. 80/2022 [para 23]
Editorial note: subsequent treatment
Applies the inception test stated in Hridaya Ranjan Prasad Verma (2000), Satishchandra Ratanlal Shah (2019) and Delhi Race Club (2024), all cited in footnote 2 of the judgment. This is a non-reportable judgment of a two-judge bench.
Hridaya Ranjan Prasad Verma v. State of Bihar
- Case
- Criminal Appeal Nos. 313-314 of 2000
- Bench
- K.T. Thomas, D.P. Mohapatra (judgment by D.P. Mohapatra, J.)
- Provisions
- Indian Penal Code, 1860, s. 415 (cheating) and s. 420 (cheating and dishonestly inducing delivery of property) (now Bharatiya Nyaya Sanhita, 2023, s. 318(1) and s. 318(4))
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Headnote
Cheating · IPC s. 415 and s. 420 (BNS s. 318) · Breach of contract and cheating distinguished · Dishonest intention at the time of the promise · Quashing of complaint, CrPC s. 482
The case, in the Court's words
On a reading of the complaint portions of which have been extracted earlier it is clear that the main offence alleged to have been committed by the appellants is 'cheating' punishable under section 420 IPC. [PDF p. 4]
Held
- On a reading of the section it is manifest that in the definition there are set forth two separate classes of acts which the person deceived may be induced to do. [...] In the first class of cases the inducing must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but not fraudulent or dishonest. [PDF p. 5]
- In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time [...] inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. [PDF p. 5]
- Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. Therefore it is the intention which is the gist of the offence. [PDF p. 5]
- To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed. [PDF p. 5]
- Therefore the core postulate of dishonest intention in order to deceive the complainant-respondent no.2 is not made out even accepting all the [...] averments in the complaint on their face value. [PDF p. 5]
Result
Accordingly the appeals are allowed. The Judgment/Order dated 13-4-1999 of the Patna High Court [...] is set aside and the proceeding in Criminal Case No. 22/96 pending in the Court of Chief Judicial Magistrate, Siwan is quashed. [PDF p. 6]
Editorial note: subsequent treatment
The passage on breach of contract and cheating is quoted in Indian Oil Corporation v. NEPC India Ltd. (2006) and in M.N.G. Bharateesh Reddy v. Ramesh Ranganathan (2022), and is cited in Satishchandra Ratanlal Shah v. State of Gujarat (2019), Manish v. State of Maharashtra (2025) and Jupally Lakshmikantha Reddy v. State of A.P. (2025). The official copy prints no paragraph numbers, so the references are to pages of the official PDF.
Headnotes are extracts from the Court's own judgments, selected by The Daily Bench for convenience. The selection is not part of the judgments, is not a law report and should not be cited. Rely on the official judgment.