Criminal Law : Essentials of Cheating and S.420 of IPC Explained by Supreme Court

Criminal Law : Essentials of Cheating and S.420 of IPC Explained by Supreme Court

In a recent Judgment, Supreme Court has explained how S.420 of IPC is to be interpreted. It was held that "it is manifest that in the definition there are two separate classes of acts which the person deceived may be induced to do. In the first class of acts he may be induced fraudulently or dishonestly to deliver property to any person. The second class of acts is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In the first class of cases, the inducement must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but need not be fraudulent or dishonest. Therefore, it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had a fraudulent or dishonest intention at the time of making the promise. From his mere failure to subsequently keep a promise, one cannot presume that he all along had a culpable intention to break the promise from the beginning."

It was held referring S.405 and S.406 of IPC that every act of breach of trust may not result in a penal offence unless there is evidence of a manipulating act of fraudulent misappropriation of a property entrusted to him. In the case of criminal breach of trust, if a person comes into possession of the property and receives it legally, but illegally retains it or converts it to its own use against the terms of contract, then the question whether such retention is with dishonest intention or not and whether such retention involves criminal breach of trust or only civil liability would depend upon the facts and circumstances of the case.

For cheating, criminal intention is necessary at the time of making false or misleading representation i.e. since inception. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriated the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver a property. In such a situation, both offences cannot co-exist simultaneously. Consequently, the complaint cannot contain both the offences that are independent and distinct. The said offences cannot coexist simultaneously in the same set of facts as they are antithetical to each other.

Criminal law ought not to become a platform for initiation of vindictive proceedings to settle personal scores and vendettas.Court must ensure that criminal prosecution is not used as an instrument of harassment or for seeking private vendetta or with an ulterior motive to pressurise the accused. 

Case reference is Inder Chand Bagri v. Jagadish Prasad Bagri [2025] GCtR 1725 (SC).