Delhi Race Club (1940) Ltd. v. State of Uttar Pradesh

2024 INSC 626

Court: Supreme Court of India (Criminal Appellate Jurisdiction)
Case: Criminal Appeal No. 3114 of 2024
Decided: 23 August 2024
Bench: J.B. Pardiwala, Manoj Misra (judgment by J.B. Pardiwala, J.)
Citation: 2024 INSC 626
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).

The headnote consists of extracts from the Court's judgment, selected by The Daily Bench for convenience. The selection is not part of the judgment, is not a law report and should not be cited. It may contain errors; rely on the official judgment. Library reference TDB-LL BNS-318/04 is our own cataloguing label and is not a citation.