Cheating And Forgery

 

 

    -By Preyoshi Bhattacharjee

    Introduction


    Cheating and forgery are the offences which we hear very often. They are closely related because sometimes forgery is committed to cheat a person. Section 415 to 420 deal with the offence of cheating, its various forms and punishment. Forgery is explained from Section 463 to 477 of Indian Penal Code, 1860. Cheating is basically saying or doing something dishonestly to get an advantage from another. Forgery means producing false documents to commit fraud.

    Cheating


    Section 415 provides with the definition of cheating. It 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”.

    Explanation.—A dishonest concealment of facts is a deception within the meaning of this section.

    Illustrations
    a) A, by falsely pretending to be in the Civil Service, intentionally deceives Z, and thus dishonestly induces Z to let him have on credit goods for which he does not mean to pay. A cheats.
    b) A, by putting a counterfeit mark on an article, intentionally deceives Z into a belief that this article was made by a certain celebrated manufacturer, and thus dishonestly induces Z to buy and pay for the article. A cheats.
    c) A, by exhibiting to Z a false sample of an article intentionally deceives Z into believing that the article corresponds with the sample, and thereby dishonestly induces Z to buy and pay for the article. A cheats.

    Essentials Of Cheating



    There should be an element of fraud or dishonest intention on the part of the accused. Mens rea is necessary for an act to be classified as cheating. In the case of Ram Jas v. State of Uttar Pradesh[[1]] Supreme Court enumerated the essentials of the offence of cheating as follows

    1. There should be fraudulent or dishonest inducement of a person by deceiving him;
    2. (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 to omit to do anything which he would not do or omit if he were not so deceived; and
    3. In cases covered by 2(b), the act of omission should be one which causes or is likely to cause damage or harm to the person induced in body, mind, reputation or property.

    Acting Dishonestly To Decieve


    One of the initial ingredients which have to be proved to establish the offence of cheating is deception. In the case of Ramautar Choukhany v. Hari Ram Todi and Anr.[[2]], the money was received as deposit by the petitioner as the Director of the Company that the amount was so taken for and on behalf of the company. There was no question of personal gain of the petitioner in receiving the money. When the complainant had paid the amount to the company it was plain and simple that he was to get it back from the company. The company never dissolved or wound up and there is no allegation that the complainant deposited the money as a result of any representation made by the petitioner it was pure and simple a voluntary act of the complainant. As such there is no allegation of any deception which impelled the complainant to deposit the money. The statement that the petitioner would make the payment was surely made as the Director of the Company and could not have been made in any other capacity. There was, therefore, no inducement nor was there any dishonesty in the transaction, even on the own showing of the complainant. Thus, there was no offence of cheating committed.

    The deception which is made must induce the other person to either deliver or retain property or to make him commit or omit something which may cause him harm.

    Thus, in the case of Swami Dhirendra Brahmachari v. Shailender Bhushan[[3]] the accused knowingly made false assertion that the Yoga course run by him is recognised by the government of India, thereby inducing unwary students to obtain admission by paying 1,000 by way of deposits, thereby cheating students. The Delhi High Court held him liable for cheating.
    The fraudulent and dishonest intention should be present at the time of making such promise or representation.
    In the case of V.Y. Jose v. State of Gujarat[[4]] there was a dispute regarding the supply of a machine for desalting the dyes. The agreement was for 18 lakhs and the respondent had to supply him machines for which 3 lakhs were already given in advance. But the appellants filed a case for cheating against the respondents as the machine did not purify the specific amount of dye which was promised. But the Supreme Court held that this is a case of breach of contract and not cheating because the dishonest intention was not present at time of making such representation.

    A dishonest concealment of facts amounts to deception within the meaning of Section 415. All concealment of facts does not amount to cheating but concealment with a dishonest intention amounts to cheating. Mens Rea is one of the essential ingredients of Section 415 and where mens rea is not established no offence of cheating can be made out. In the case of Anil Kumar Bose v. State of Bihar[[5]] the Supreme Court held that a failure on the part of concerned employees to perform their duties or to observe rules of procedure, may be an administrative lapse on their part and may at the best amount to a case of error of judgment or breach of performance of duty, which, per se, cannot be equated with dishonest intention.

    The word “dishonestly” is defined by Section 24 of IPC. It states that 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”.

    Inducement To Deliver Or Retain Property Or Commission Or Omission Of An Act


    The second essential element of the offence of cheating is ‘inducement’ leading to either delivery of property or doing of an act or omission which one would not do without being deceived. Mere deceit is not sufficient to prove the offence of cheating unless it is proved that there was an inducement to deliver some property or to act or omit.
    In the case of Bhagwan Samardha Sreepadha Vallabha Venkata Vishwananda Maharaj v. State of Andhra Pradesh[[6]] the Supreme Court held that the representation made by the accused, that he had divine healing powers through his touches, thereby making the complainant believe that he could cure his little girl of her congenital dumbness through his divine powers was fraudulent and amounted to inducement. As the complainant was asked to give money for that, this was held to be cheating under Section 415.

    Another thing which has to be proved is that the person who was cheated would not have done or omitted to do or delivered such property without such dishonest inducement.

    Damage Caused Or Likely To Be Caused


    Section 415 states that the false inducement should cause or is likely to cause damage to body, mind, reputation or property. In case there is no damage to the complainant, the accused cannot be held guilty of the offence of cheating.
    In the case of Hari Sao v. State of Bihar[[7]] Supreme Court held that the false representation made by the accused to the station master leading to his making endorsement on the receipt, could not, even if established as a dishonest and fraudulent act, cause any harm or damage to the railway. Thus, he accused was acquitted of the charges.
    However, if we look at the present cases a wrongful gain by the accused is not necessary. In the case of Ram Prakash Singh v. State of Bihar[[8]] an employee of Life Insurance Corporation was accused of having introduced fake and false insurance proposals. The proposals were made in the name of non- existing persons by the accused. Although the accused did not gain any benefit. But he was held guilty of cheating by the Supreme Court as such fake or forged proposals are bound to affect the reputation of the insurance company.

    The use of the term ‘cause’ in Section 415 postulates a direct and proximate connection between the act or omission and the harm and damage to the victim. [[9]]

    Punishment For Cheating



    Section 417 provides that whoever cheats shall be punished with either imprisonment which may extend to one year or with fine or both.

    Section 420 states the punishment of imprisonment which may extend to seven years and a fine for a person who dishonestly induces the person deceived to deliver any property or to destroy or alter any whole or any part of a valuable security or anything which is signed or sealed and can be converted into valuable security.

    Specific Forms Of Cheating



    Cheating by personation

    Section 416 states what cheating by personation is. It states that-
    A person is said to “cheat by personation” if he cheats by pretending to be some other person, or by knowingly substituting one person for or another, or representing that he or any other person is a person other than he or such other person really is.

    Explanation.—The offence is committed whether the individual personated is a real or imaginary person.

    Illustration
    (a) A cheats by pretending to be a certain rich banker of the same name. A cheats by personation.
    (b) A cheats by pretending to be B, a person who is deceased. A cheats by personation.

    So cheating by personation can be done in the name of a real or a fictional person. You just have to pretend to be someone else and cheat the other person. Section 419 provides a punishment with imprisonment which may extend to three years or with a fine, or with both, if a person cheats by personation.

    Cheating out of fiduciary relation

    Section 418 states that

    Cheating with knowledge that wrongful loss may ensue to person whose interest offender is bound to protect.—Whoever cheats with the knowledge that he is likely thereby to cause wrongful loss to a person whose interest in the transaction to which the cheating relates, he was bound, either by law, or by a legal contract, to protect, shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.

    However, intention to cheat needs to be present. In the case of S Shankarmani & Ors v. Nibar Ranjan Parida[[10]] a bank wanted to hire a house and for that purpose the landlord incurred a huge expense to furnish the house. However, for certain reasons beyond the control of the bank, the house could not be taken on rent. Thus, the bank was not guilty of cheating as there was no intention to cheat.

    Forgery



    Forgery, as an offence is defined in Section 463 of IPC. While, Section 465 provides punishment for forgery. Section 463 states that
    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.

    Section 464 provides how a false document can be made. It states that
    A person is said to make a false document or false electronic record—

    First — Who dishonestly or fraudulently—
    (a) makes, signs, seals or executes a document or part of a document;
    (b) Makes or transmits any electronic record or part of any electronic record;
    (c) Affixes any electronic signature on any electronic record;
    (d) makes any mark denoting the execution of a document or the authenticity of the electronic signature, with the intention of causing it to be believed that such document or part of document, electronic record or electronic signature was made, signed, sealed, executed, transmitted or affixed by or by the authority of a person by whom or by whose authority he knows that it was not made, signed, sealed, executed or affixed; or

    Secondly.—Who without lawful authority, dishonestly or fraudulently, by cancellation or otherwise, alters a document or an electronic record in any material part thereof, after it has been made, executed or affixed with electronic signature either by himself or by any other person, whether such person be living or dead at the time of such alteration; or

    Thirdly.—Who dishonestly or fraudulently causes any person to sign, seal, execute or alter a document or an electronic record or to affix his electronic signature on any electronic record knowing that such person by reason of unsoundness of mind or intoxication cannot, or that by reason of deception practiced upon him, he does not know the contents of the document or electronic record or the nature of the alteration.


    Illustrations
    (a) A has a letter of credit upon B for rupees 10,000, written by Z. A, in order to defraud B, adds cipher to the 10,000, and makes the sum 1,00,000 intending that it may be believed by B that Z so wrote the letter. A has committed forgery.

    Explanation
    1.— A man’s signature of his own name may amount to forgery.
    a) A signs his own name to a bill of exchange, intending that it may be believed that the bill was drawn by another person of the same name. A has committed forgery
    Explanation 2.—The making of a false document in the name of a fictious person, intending it to be believed that the document was made by a real person, or in the name of a deceased person, intending it to be believed that the document was made by the person in his lifetime, may amount to forgery.
    a) A draws a bill of exchange upon a fictious person, and fraudulently accepts the bill in the name of such fictitious person with intent to negotiate it. A commits forgery.
    Explanation 3.—For the purposes of this section, the expression affixing electronic signature shall have the meaning assigned to it in clause (d) of sub-section (1) of section 2 of the Information Technology Act, 2000.

    Essentials Of Forgery



    The offence of forgery is defined in Section 463 as the making of false documents or false electrified records. Whereas, Section 464 defines the making of false document or false electrified record, within the meaning of forgery.The element of fraud is necessary in the offense of forgery.The essential elements of forgery as held in the case of Sushil Suri v. CBI are as follows[[11]]
    1. The making of a false document or a false electronic record or a part of it;
    2. Such making should be with an intent to:
    a) Cause damage or injury to the public or to any person; or
    b) Support any claim or title; or
    c) Cause any person to part with property; or
    d) Enter into express or implied contract; or
    e) To commit fraud or so that fraud may be committed.

    In Daniel Hailey Walcott v. State of Madras[[12]] the Madras High Court described the main elements of the offence of forgery as

    1. The document or the part of document must be false in fact;
    2. It must have been made dishonestly or fraudulently within the meaning of the words used in Section 464 of IPC; and
    3. It must have been made with one intention as mentioned in Section 463 of IPC.
    Making A False Document Or False Electronic Record

    Section 29 of IPC defines the word “document”. The word “document” denotes any matter expressed or described upon any substance by means of letters, figures or marks, or by more than one of those means, intended to be used, or which may be used, as evidence of that matter. The explanation to this section provides that it is immaterial by what means or upon what substance the letters, figures or marks are formed, or whether the evidence is intended for, or may be used in, a Court of Justice, or not. Section 29A defines “electronic record”. The words “electronic record” shall have the meaning assigned to them in clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000. Section 464 provides for three main ways of creating a false document or false electronic record. It can be made by

    a) By making, sealing, signing or executing a document or a part thereof; or by making or transmitting any electronic record or a part thereof; or by affixing any electronic signature on any electronic record; or
    b) By alteration of a document or an electronic record; or
    c) By causing a person, who is innocent of the contents or nature of the alteration done to a document or an electronic record, to sign, seal or execute it.
    In the case of Dr Vimla v. Delhi Administration[[12]] the appellant purchased a car in the name of her daughter Nalini, who was a minor. She also got the car insured on her daughter’s name. Later the car met with an accident and she claimed insurance which she collected by signing on the documents in the name of her daughter. But the Supreme Court did not held her guilty of forgery as she did not signed the documents fraudulently or with an intention to cause injury to the insurance company and no wrongful gain was caused to her and wrongful loss was caused to the company.
    Altering date of birth in birth certificates amounts to forgery.[[14]] In the case of Dharmendra Nath Shastri v. Rex[[15]] the accused was alleged to have made certain alterations to the written statement filed by him, which were originally not present. It was held that the act of the accused clearly fell under clause 1 of Section 464.

    Intention



    The intention to cause injury is necessary in the case of causing damage or injury to the public or any person. The intent to commit fraud is necessary. The act of falsifying the document or electronic record should be done dishonestly or fraudulently. Section 24 defines a dishonest act. It states that 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”.

    Section 25 defines a fraudulent act. It states that a person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise. In the case where the intention to defraud was missing the appellant was held not guilty of forgery.[[16]] In the case of GS Bansal v. Delhi Administration[[17]] the father of the accused had opened a ration depot and had deposited some security money for the same. Thereafter, he was to receive the security amount but before that he died. The son received the money in the name of his father and thus, he was accused of the offence of forgery. Here the Supreme Court held that even though there was no economic gain or loss to any of the party but there was a non economic benefit which the accused received as normally he would have to wait for three months to receive such amount, thus, he got a wrongful gain. The Court held him guilty of forgery.

    Punishment For Forgery


    Section 465 provides for a punishment either with imprisonment which may extend to two years or with a fine or both.

    Other Specific Forms Of Forgery
    There are several other specific forms of forgery which are separately mentioned in IPC. These are as follows
    1. The forgery of record of Court or Public register given under Section 466.
    2. Forgery of valuable security or will provided in Section 467.
    3. Forgery for the purpose of cheating given in Section 468.
    4. Forgery for harming reputation given under Section 469.
    5. Using a forged document or electronic record as genuine given under Section 471.
    6. Making or possessing counterfeit seal etc, with an intend to commit forgery is punishable under Section 467.
    7. Making or possessing counterfeit seal etc, with an intend to commit forgery punishable otherwise is given in Section 473.
    8. Having possession of document described in Section 466 and 467, knowing it to be forged and intending to use it as genuine provides for a punishment in Section 474.
    9. Section 477 mentions fraudulent cancellations, destruction etc of will, authority to adopt or valuable security.
    10. Section 477A gives punishment for falsification of accounts.

    Difference Between Cheating And Forgery


    1. Forgery is defined in Section 463, while cheating is defined in Section 415.
    2. Cheating can be done by an oral statement or by a document but forgery can only be committed by document.
    3. Cheating is an offence against property, while, forgery is an offence relating to documents and property marks.
    4. Punishment of cheating is either with imprisonment which may extend to one year or with fine or both, which is given under Section 417. Whereas, forgery is punished either with an imprisonment which may extend to two years or with fine or both as given under Section 465.
    5. Cheating is a wide offence and forgery is also a kind of cheating. So, forgery can be committed for the purpose of cheating.
    6. Cheating can be committed against a person or a person’s property. But forgery can only be committed against the documents and electronic records.
    So, these are the basic differences between the offence of forgery and the offence of cheating. Cheating is a wide term. A person can also be cheated by the use of forged documents or electronic records. But these are separate offences as such and have different punishments in IPC.






    References

    1) AIR 1974 SC 1811, (1974) Cr Lj 1261 (SC)
    2) 1982 SCC Gau 49, (1981) Cr Lj 1271
    3) 1995) Cr Lj 1810 Del
    4) (2009) 3 SCC 78, 2008 (16) SCALE 167
    5) AIR 1974 SC 1560, (1960) Cr Lj 1026 (SC)
    6) AIR 1999 SC 2332
    7) AIR 1970 SC 843, (1970) Cr Lj 849 SC
    8) AIR 1998 SC 296
    9) Ramji Lakhamsi Budhadev v. Harshadrai Nandalal Bhuta and others AIR 1960 Bom 268, (1960) Cr Lj 812 (Bom)
    10) (1991) Cr Lj 65 (Ori)
    11) AIR 2011 SC 1713,(2011) Cr Lj 2939 (SC)
    12) AIR 1968 Mad 349, (1968) Cr Lj 1282 (Mad)
    13) AIR 1963 SC 1572, (1963) 2 Cr Lj 434 (SC)
    14) Galla Nageshwara Rao v. State of Andhra Pradesh, AIR 1951 Pat 86
    15) AIR 1949 All 353
    16) Dr Vimla v. Delhi Administration, AIR 1963 SC 1572, (1963) 2 Cr Lj 434 (SC)
    17) AIR 1963 SC 1577, (1963) 2 Cr Lj 439 (SC)






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