420, CHEATING, FRAUD, THEFT, FORGERY

Section 420 IPC: Everything You Need to Know

Definition

Section 420 of The Indian Penal Court talks about the offence which is committed by the person who cheats another person and thereby induces the deceived to deliver any property. This provision provides punishment for the same.

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According to the IPC, Section 420 states that 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 also be liable to fine.

Essential elements of Section 420

(i) Cheating;
(ii) Dishonest inducement to deliver property or to make, alter or destroy any valuable security or anything which is sealed or is capable of being converted into a valuable security and
(iii) Mens rea of the accused at the time of making the inducement.

Making of a false representation is one of the essential ingredients to institute the offence of cheating under Section 420 IPC. In order to bring a case for the offence of cheating, it is not merely satisfactory to prove that a false representation had been made, but it is further necessary to prove that the representation was false to the knowledge of the accused and was made in order to deceive the complainant.

Cheating

The term “cheating” has been defined under Section 415 of the Indian Penal Code. The element of cheating must be present in every offence under Section 420 of I.P.C.

Section 415 of IPC 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”.

For example – There are two persons A and Z. A exhibits the false sample of an article to Z and intentionally make Z believes that the article corresponds with the sample. A here induces Z to buy and pay for the false sample of article. A cheats Z.

Acting dishonestly

Section 24 defines that what is “acting dishonestly”. When the doing of any act or not doing of any act causes wrongful gain of property to one person or a wrongful loss of property to a person, the said act is done dishonestly.

Property

The word property may basically be defined as all things which can be measured in terms of money. The said thing should be capable of being possessed by a person for the exclusive use or enjoyment as owner of that thing.

Fraudulently

Section 25 defines the term “Fraudulently”. It says that a person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise.

Mens rea

Mens rea is a legal phrase which used to define the mental state of a person while committing a crime and that should be intentional. It can refer to a general intent to break the law or a specific prearranged plan to commit a particular offense. A criminal prosecutor must show beyond any reasonable doubt to convict an accused person that the suspect actively and knowingly contributed in a crime that affected another person or their property.

How Cheating is to be proved

You have to prove that there was an intention to cheat at the time of making the misrepresentation; and this fact is to be proved on the basis of all the subsequent conduct as acts and omissions of the accused. Therefore, all the acts and omissions of the accused must be clearly and legibly set out right from the date of making of false representation, till the filing of the complaint.

It must be shown that there is a failure of the promise which was made. It must be shown that there was no effort on the part of accused to perform his promise. The test of prudent man must be applied to appreciate the evidence on record.

Who is a Prudent Man?

A prudent man is a wise man but may not be a genius. A prudent man who is not in haste. He is not influenced by his emotions and act after weighing the circumstance. He rethinks and willing to learn. He struggles. He is willing to see the point of view, which was never in his mind. He may not be learned but has robust common sense and has basic instinct that moves man and woman. The said definition of prudent man calls upon the judge to become realistic and practical. Good faith anticipates an honest effort to discover the facts upon which the exercise of power rests.

Cognizance of an offence under Section 420

The offence is cognizable and falls under the category of Non Bailable. It is triable by Magistrate of the First Class and therefore FIR or Application u/s 156(3) or Private Complaint u/s 200 may be preferred.

Punishment of an offence under Section 420

The punishment which is given under section 420 of IPC for the offence is imprisonment for a term which may extend to seven years, and also be liable to fine.

Distinction between mere ‘breach of contract’ and the ‘offence of cheating’

Distinction depends upon the intention of the accused at the time of inducement which must be judged by his subsequent act but of which the subsequent act is not the sole standard. 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 substance of the offence. It is necessary to show that he had fraudulent or dishonest intention at the time of making the promise to hold a person guilty for the offence of cheating. From his mere failure to keep up promise consequently such a culpable intention cannot be presume right at the beginning, that is when he made the promise.

 

 

 

 

 

 

Punishment for Forgery – Section 465 of Indian Penal Code:

Whoever commits forgery shall be punished with imprisonment of either description for a term which may extend to two years or with fine or with both.

ADVERTISEMENTS:

Punishment for Forgery of record of Court or of public register etc. (Section 466):

[Whoever forges a document or an electronic record], purporting to be a record of proceeding of or in a Court of Justice, or a register of birth, baptism, marriage or burial or a register kept by a public servant as such, or a certificate or a document purporting to be made by a public servant in his official capacity, or an authority to institute or defend a suit, or to take any proceedings therein, or to confess judgment, or a power of attorney, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

[Explanation. — For the purposes of this section register includes any list, data or record of any entries maintained in the electronic form as defined in clause (r) of sub-section (1) of Section 2 of the Information Technology Act, 2000. As defined by clause (r) of Section 2(1) of the Information Technology Act, 2000 “electronic form” means as follows

Electronic form, with reference to information, means any information general, sent, received or stored in media, magnetic, optical computer memory, micro film, computer generated micro fiche or similar device.

ADVERTISEMENTS:

Punishment for Forgery of valuable security, Will, etc. (Section 467):

Whoever forges a document which purports to be a valuable security, or a Will, or an authority to adopt a son or which purports to give authority to any person to make or transfer any valuable security, or to receive the principal, interest or dividends thereon, or to receive or to deliver any money, movable property or valuable security, or any document purporting to be an acquaintance or receipt acknowledging the payment of money or an acquaintance or receipt for the delivery of any movable property or valuable security, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years and shall also be liable to fine.

Punishment for Forgery for purpose of cheating (Section 468):

Whoever commits forgery, intending that the document or electronic record forged shall be used for the purpose of cheating, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

ADVERTISEMENTS:

Punishment for Forgery for purpose of harming reputation (Section 469):

Whoever commits forgery, intending that the document or electronic record forged shall harm the reputation of any party, or knowing that it is likely to be used for that purpose, shall be punished with imprisonment of either description for a term which may extend to three years, and shall also be liable to fine.

Punishment for Forged document (Section 470):

A false document or electronic record made wholly or in part by forgery is designated “forged document or electronic record”.

Punishment for Using as genuine a forged document (Section 471):

Whoever fraudulently or dishonestly uses as genuine any document or electronic record which he knows or has reason to believe to be a forged document or electronic record, shall be punished in the same manner as if he had forged such document or electronic record.

The accused applied to the Superintendent of Police at Poona for employment in the police service. In support of his application he presented two certificates which he knew to be false. One of these certificates was a wholly fabricated document, whilst the other was altered by several additions made subsequently to the issue of the certificate.

It was held that the accused was guilty of offence under Sections 463 and 471. But where the accused applied for admission in a college on the basis of forged certificates Supreme Court held that these certificates cannot be treated as valuable securities and conviction under Sections 467 and 471, I.P.C., cannot be sustained.

When the endorsements on certain passports have been made with a view to help the person having his photograph on the passport to travel to foreign countries to which he is not entitled to travel, such endorsements are obviously made dishonestly or fraudulently and therefore the offence under Section 471 is made out. Accused submitted bill regarding leave travelling concession without actually undertaking travelling. The bill was submitted as genuine but in fact the same was forged. Offence under Section 471 is committed.

Punishment for Making or possessing counterfeit seal, etc., with intent to commit forgery, punishable under Section 467:

Whoever makes or counterfeits any seal, plate or other instrument, for making an impression, intending that the same shall be used for the purpose of committing any forgery which would be punishable under section 467 of this Code or with such intent, has in his possession any such seal, plate or other instrument, knowing the same to be counterfeit, shall be punishable with imprisonment for life, or with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

Punishment for Making or possessing counterfeit seal, etc., with intent to commit forgery punishable otherwise (Section 473):

Whoever makes or counterfeits any seal, plate or other instrument for making an impression, intending that the same shall be used for purpose of committing any forgery which would be punishable under any section of this Chapter other than Section 467, or, with such intent, has in his possession any such seal, plate or other instrument knowing the same to be counterfeit, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

Punishment for Having possession of [document or electronic records] described in Section 466 or 467, knowing it to be forged and intending to use it as genuine (Section 474):

[Whoever has in his possession any document or electronic record, knowing the same to be forged and intending that the same shall fraudulently or dishonestly be used as genuine, shall, if the document or electronic record is one of the description mentioned in section 466 of this Code] be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine, and if the document is one of the description mentioned in Section 467, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

Punishment for Counterfeiting device or mark used for authenticating documents described in Section 467, or possessing counterfeit marked material (Section 475):

Whoever counterfeits upon, or in the substance, any material, any device or mark used for the purpose of authenticating any document described in Section 467 of this Code, intending that such device or marks shall be used for the purpose of giving the appearance of authenticity to any document then forged or thereafter to be forged on such material, or who, with such intent, has in his possession any material upon or in the substance of which any such device or mark has been counterfeited, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

Punishment for Counterfeiting device or mark used for authenticating documents other than those described in Section 467, or possessing counterfeit marked material (Section 476):

Whoever counterfeits upon, or in the substance any material, any device or mark used for the purpose of authenticating any document [or electronic record] other than the documents described in Section 467 of this Code, intending that such device or mark shall be used for the purpose of giving the appearance of authenticity to any document [or electronic record] then forged or thereafter to be forged on such material or who with such intent, has in his possession any material upon or in the substance of which any such device or mark has been counterfeited, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

Punishment for Fraudulent cancellation, destruction, etc., of Will, authority to adopt or valuable security (Section 477):

Whoever fraudulently or dishonestly, or with intent to cause damage or injury to the public or to a person, cancels, destroys or defaces, or attempts to cancel, destroy or deface, or secretes or attempts to secrete any document which is or purports to be a Will, or an authority to adopt a son, or any valuable security, or commits mischief in respect to such document, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

Punishment for Falsification of accounts (Section 477-A):

Whoever being a clerk, officer or servant, or employed or acting in the capacity of a clerk, officer or servant, wilfully and with intent to defraud, destroy, alter, mutilate or falsify any book, [electronic record], paper, writing, valuable security or account which belongs to or is in the possession of his employer, or has been received by him for or on behalf of his employer, or wilfully and with intent to defraud, make or abet the making of any false entry in, or omits or alters or abets the omission or alteration of any material particular form or in any such book,[electronic record], paper, writing, valuable security or account shall be punished with imprisonment of either description for a term which may extend to seven years, or with fine, or with both.

Explanation:

It shall be sufficient in any charge under this section to allege a general intent to defraud without naming any particular person intended to be defrauded or specifying any particular sum of money intended to be the subject of the fraud, on any particular day on which the offence was committed.

Ingredients:

The following facts must be proved to establish falsification of accounts:

(i) The person coming within its purview must be clerk, an officer or a servant or he might be working as a clerk or an officer or a servant.

(ii) He must wilfully and with intention to commit fraud

(a) destroy, alter or falsify any book, electronic record], paper, writing or valuable security which —

(i) Belongs to his employer or is in his possession, or

(ii) It has been obtained by him for or on behalf of his employer,

(b) Make or abet the making of any false entry in or omit or alter or abet the omission or alteration of any material particular from or in any such book, [electronic record], paper, writing, valuable security or account.

The accused falsified a measurement book of repairs to buildings and a bill with intent that a contractor’s bill for the repairs done might be passed without actual measurement. The Court held that the act of the accused amounted to a fraudulent falsification of accounts. The finding that entries were made inadvertently and negligently is destructive of charge under this section because for a charge under this section the entries must be made wilfully with a view to defraud.

Onus of proof of the existence of every ingredients of the charge always rests on the prosecution and never shifts.

The writing may be established by the testimony of expert witness or by the evidence of witnesses who are fully acquainted with the writing. The Court may itself examine the similarities in the disputed and admitted writings.

Definition of Forgery

Forgery – Section 463 of IPC:

Whoever makes any false document or false electronic record or part of a document or electronic record with intent to cause damage or injury,] to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, commits forgery.

Ingredients:

The ingredients of an offence of forgery so defined, are:

(1) The making of a false document or false electronic record or part of it.

(2) Such making should be with intent to —

(i) Cause damage or injury to the public or to any person; or

(ii) Support any claim or title; or

(iii) Cause any person to part with property; or

(iv) Enter into any express or implied contract; or

(v) Commit fraud or that fraud may be committed.

One of the Supreme Court cases having a bearing on the above mentioned ingredients is Rugmani v. Menon. The factual situation of the case was that an application for permission or sanction for construction of certain premises was filed by a person under the direction or instruction of another in mistaken name.

Thereupon, was a finding of the High Court that it was not signed by the person on whose behalf it was purported to have been made. However, there was no finding to the effect that signatures by the said party were made to cause harm to the person on whose behalf they were made or without their knowledge or that they were untrue.

The Supreme Court held that mere denial of signatures by person on whose behalf they were purported to have been made was not sufficient to warrant the conclusion that the person submitting the application committed forgery.

The Supreme Court took the opportunity to observe in Para 6 that “The High Court, with respect, misdirected itself, in being oblivious of the difference between filing an application by a person under direction or instruction of another in mistaken name and making a false document, with intent to cause damage or injury to any person or to support any claim or title or to commit any act with intent to deceive another”.

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