Law and You > Criminal Laws > Bharatiya Nyaya Sanhita, 2023 > Cheating (Ss. 318 and 319 BNS)

Among the various offences addressed under the Bharatiya Nyaya Sanhita, 2023 (BNS) the offence of cheating occupies a crucial place due to its wide applicability in cases involving fraud, deception, and dishonest inducement. Cheating, as defined under the BNS, revolves around the core idea of deception coupled with dishonest or fraudulent intention, leading a person to deliver property or act in a manner they otherwise would not have, thereby causing harm or loss. In addition, the BNS separately recognizes cheating by personation, thereby addressing situations where deception is carried out through false identity or impersonation. Together, these provisions reflect the legislature’s intent to comprehensively tackle evolving forms of fraud in contemporary society. With increasing instances of financial scams, digital frauds, and misuse of trust, understanding the scope and ingredients of cheating under the Bharatiya Nyaya Sanhita becomes essential for legal practitioners, scholars, and the general public alike. This article seeks to examine the concept, essential elements, and legal implications of cheating under the BNS, 2023.

The Offence of Cheating:

S. 318 BNS:

Cheating:

(1) 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.

(2) Whoever cheats shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.

(3) 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 five years, or with fine, or with both.

(4) 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 Ingredients of Cheating (S. 318(1) BNS):

• The accused had deceived a person (victim);
• The accused did it fraudulently or dishonestly; and
• By this act the accused induced that person to deliver any property to any person or induced to consent that any person to retain any property; or
• The accused induced that person to do or omit to do anything which he would not do or omit if he were not so deceived, and the act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property.

In Hridaya Rangan Pd. Verma v. State of Bihar, AIR 2000 SC 2341 case, the Supreme Court observed that 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. 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. The Supreme Court also observed that 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 place he may be induced fraudulently or dishonestly to deliver any property to any person. The second class of acts set forth in the section 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 inducing must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but not fraudulent or dishonest.

Ingredients for the First Part 

• The accused deceived some person. 
• By deception he induced that person. 
• The above inducement was fraudulent and dishonest. 
• The person so induced delivered some property to or consented to the retention of some property by any person. 

Ingredients for the Second Part 

• The accused deceived some person. 
• The accused thereby induced him. 
• Such inducement was intentional. 
• The person so induced did or omitted to do something

Deception:

The element of deception is the very foundation of the offence of cheating under the BNS. Deception involves intentionally causing a person to believe something that is false, either by making a false representation, concealing material facts, or creating a misleading impression through words or conduct. It is essential that such deception exists at the very inception of the transaction and is accompanied by a dishonest or fraudulent intention.

Mere breach of promise or failure to fulfill an obligation does not amount to cheating unless it is shown that the accused had the intention to deceive from the beginning. Furthermore, the deception must actually influence the victim, leading them to act or omit to act in a manner they otherwise would not have, thereby causing or being likely to cause harm. Thus, deception acts as the starting point that triggers the chain of inducement and resulting damage, making it a crucial element in establishing the offence of cheating.

Deception by Making False Representation:

Making a false representation is one of the most common forms of deception in the offence of cheating. It involves knowingly stating something untrue with the intention to mislead another person. Some illustrative examples are:

• Illustration (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.
• Illustration (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.
• Illustration (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.
• A person falsely claims ownership of a piece of land and induces another to purchase it, despite having no legal title over the property.
• A seller represents that a product is brand new and of high quality, while knowing that it is defective or used.
• An individual may falsely state that they have secured a government job for someone and demand money in return, despite having no such authority or influence.
• A person promises high investment returns by claiming association with a legitimate company, even though no such investment scheme exists.
• A candidate may submit forged educational certificates to secure a job, thereby misleading the employer.
• Impersonating a bank official or government officer to extract sensitive information or money from a victim.

In all these cases, the essence lies in knowingly making a false statement of fact with the intent to deceive, which induces the victim to act and results in harm or potential harm.

Deception by Concealing Material Facts:

Concealment of material facts is a form of deception where a person intentionally hides important information that they are duty-bound to disclose, thereby misleading another person. Some common examples include:

• Illustration (h): A intentionally deceives Z into a belief that A has performed A’s part of a contract made with Z, which he has not performed, and thereby dishonestly induces Z to pay money. A cheats.
• Illustration (i): A sells and conveys an estate to B. A, knowing that in consequence of such sale he has no right to the property, sells or mortgages the same to Z, without disclosing the fact of the previous sale and conveyance to B, and receives the purchase or mortgage money from Z. A cheats.
• A seller knowingly conceals that a house has serious structural defects, such as cracks in the foundation, and sells it to a buyer without disclosing these issues.
• A person selling a vehicle may hide the fact that it has been involved in a major accident or has significant mechanical problems.
• An individual may suppress crucial information, such as existing debts or liabilities, while entering into a partnership or loan agreement, thereby misleading the other party.
• A person may deliberately conceal pre-existing medical conditions while obtaining a policy, which is a material fact for the insurer.
• A company hides key terms or risks in a contract, such as hidden charges or unfavourable conditions, which significantly affect the decision of the other party.
• A job applicant may deliberately omit important negative information, such as prior termination for misconduct, when such disclosure is necessary.

In all these cases, the person does not make an explicit false statement but intentionally withholds material information, leading the other party to form a mistaken belief and act upon it, which may result in harm.

Deception by creating a misleading impression through words or conduct:

Deception can also occur by creating a misleading impression through words or conduct, even without an explicit false statement or direct concealment. In such cases, the overall behaviour of a person leads the victim to form a false belief. Some examples are:

• Illustration (f): A intentionally deceives Z into a belief that A means to repay any money that Z may lend to him and thereby dishonestly induces Z to lend him money, A not intending to repay it. A cheats.
• Illustration (g): A intentionally deceives Z into a belief that A means to deliver to Z a certain quantity of indigo plant which he does not intend to deliver, and thereby dishonestly induces Z to advance money upon the faith of such delivery. A cheats; but if A, at the time of obtaining the money, intends to deliver the indigo plant, and afterwards breaks his contract and does not deliver it, he does not cheat, but is liable only to a civil action for breach of contract.
• A person dresses and behaves like a police officer, using uniforms or symbols, and thereby creates the impression that they have official authority, inducing others to comply with their directions.
• An individual may set up an office with fake branding, documents, and staff to give the appearance of a legitimate business, thereby attracting customers or investors.
• A shopkeeper may display branded packaging and logos in a way that suggests the goods are genuine, while actually selling counterfeit products.
• A person attends meetings, uses technical jargon, and presents fabricated documents to create the impression of being a qualified professional, thereby gaining trust and securing money or opportunities.
• A person accepts advance payment for goods or services while behaving as if they fully intend to deliver, despite having no such intention from the outset.
• Repeatedly assuring someone of repayment while simultaneously taking steps to avoid repayment can create a misleading impression of honesty.

In all such situations, it is the overall impression created by words, actions, or behaviour that misleads the victim, resulting in inducement and potential harm, thereby satisfying the element of deception in cheating.

Deception by Misappropriation:

Deception by misappropriation generally involves situations where a person dishonestly converts property for their own use after obtaining it through deception or trust, thereby causing loss to another. The offence of misappropriation is defined under Section 314 BNS. It deals only with movable properties and not with body, mind, reputation, or immovable property.  Some illustrative examples are:

• A person borrows money from another by falsely assuring that it will be used for a specific purpose, such as starting a business, but instead uses it for personal luxury expenses from the very beginning. Here, the initial deception coupled with dishonest use amounts to cheating.
• An employee is entrusted with company funds for official work but, with a pre-existing intention, diverts the money for personal use.
• An agent who collects money from clients on behalf of a company but retains it for themselves, instead of depositing it, engages in misappropriation through deception.
• A person may also take goods on credit by falsely representing their financial stability or intention to pay, and then sells those goods and keeps the proceeds without ever intending to make payment.
• Someone is entrusted with property for safe custody, but instead of returning it, they dishonestly uses or disposes of it as their own.

In all such cases, the key element is that the accused had a dishonest intention either at the time of obtaining the property or developed it in a manner linked with deception, and thereafter misappropriated the property, resulting in wrongful gain to themselves and wrongful loss to another.

Fraudulent and Dishonest Intention:

Fraudulent and dishonest intention is a crucial mental element (mens rea) in the offence of cheating. It determines whether a wrongful act amounts to cheating or merely a civil wrong such as breach of contract.

Fraudulent intention refers to the intent to deceive another person in order to gain an unfair advantage. It involves deliberate misrepresentation or deceit with the objective of causing harm or securing a benefit through wrongful means. The focus here is on the act of deception itself. Dishonest intention, on the other hand, involves the intention to cause wrongful gain to one person or wrongful loss to another. It is concerned with the outcome of the act, where the accused aims to benefit at the expense of the victim.

A key requirement is that such intention must exist at the very beginning of the transaction. If a person initially acts in good faith but later fails to fulfill a promise, it does not amount to cheating unless it can be shown that the intention to deceive or act dishonestly was present from the outset. Some illustraed examples are:

• Illustration (d): A, by tendering in payment for an article a bill on a house with which A keeps no money, and by which A expects that the bill will be dishonoured, intentionally deceives Z, and thereby dishonestly induces Z to deliver the article, intending not to pay for it. A cheats.
• Illustration (e): A, by pledging as diamonds articles which he knows are not diamonds, intentionally deceives Z, and thereby dishonestly induces Z to lend money. A cheats.
• A person takes money by promising to deliver goods while knowing from the start that they will not deliver them, it reflects fraudulent and dishonest intention. However, if the person genuinely intended to perform the contract but later could not do so due to unforeseen circumstances, it would not constitute cheating.

Thus, fraudulent and dishonest intention forms the foundation of criminal liability in cheating, distinguishing it from mere non-performance or breach of obligations.

Inducement:

Inducement is a core element of the offence of cheating, and it directly follows the act of deception. It refers to the process by which the accused persuades, influences, or leads the victim to act or omit to act in a particular manner.

Inducement means that the deception practiced by the accused must operate on the mind of the victim, causing them to make a decision they would not have made if they had known the truth. It is not enough that a false statement is made; it must actually affect the victim’s conduct. The victim should be moved by such deception to either deliver property, consent to its retention, or perform (or abstain from) an act.

Inducement can take different forms. It may result in the delivery of property, such as when a person is persuaded to part with money based on false promises. It may also involve consent to retain property, where the victim allows another to keep property under a mistaken belief. Further, inducement includes situations where a person is led to do or omit an act, such as signing a contract, transferring rights, or refraining from taking legal action.

A crucial aspect of inducement is that there must be a clear nexus between the deception and the act of the victim. If the victim’s action is not a direct consequence of the deception, the requirement of inducement is not satisfied. Additionally, the inducement must be accompanied by dishonest or fraudulent intention at the time of making the representation. Thus, inducement acts as the link between deception and harm—it transforms a false representation into a legally punishable act by causing the victim to act to their detriment.

Punishment for Cheating S. 318(2):

Imprisonment of either description for a term which may extend to three years, or with fine, or with both.
Nature of Offence:

The offence is Noncognizable, Bailable, and triable by any Magistrate.

Aggravated Forms of Cheating:

Cheating with Knowledge that Wrongful Loss may Ensue to Person whose Interest Offender is Bound to Protect:

Section 318(3) BNS deals with cheating with the knowledge that the action is likely to cause wrongful loss to a person whose interest the offender was legally bound to protect. Cheating with knowledge of likely wrongful loss occurs when a person, entrusted by law or contract to protect another’s interest, deceives them in a way that is likely to cause harm. In this offence, the offender not only commits deception but also abuses a position of trust or duty, such as an agent, banker, trustee, or employee, who is legally or contractually bound to safeguard the victim’s property or rights. The knowledge that their act will likely result in loss distinguishes this from ordinary cheating, emphasizing the mental element of mens rea.

Examples:

• A company accountant is responsible for safeguarding the company’s finances. Knowing that transferring money to their personal account would cause loss to the company, they dishonestly divert funds. The accountant cheats despite a legal duty to protect the company’s interests.
• A trustee managing a trust fund or an agent handling a client’s property knowingly diverts property for personal gain. Here, the person cheats while breaching their fiduciary duty, which they are legally bound to uphold.
• A bank manager, who has a duty to safeguard customers’ deposits, manipulates account records to divert funds into their own account. By doing so, they cheat with knowledge that it will cause wrongful loss to the depositor, whose interests they are obligated to protect.
• A contractor receives advance payment for construction materials or services under a contract but uses the money for personal purposes, knowing that this will cause loss to the client. The contractor cheats while violating contractual obligations.

Punishment for Cheating S. 318(3):

Imprisonment of either description for a term which may extend to five years, or with fine, or with both.

Nature of Offence:

The offence is Noncognizable, Bailable, and triable by any Magistrate.

Cheating and Dishonestly Inducing Delivery of Property:

Section 318(4) BNs deals with cheating and dishonestly inducing a person to deliver property, securities, or valuable items. Cheating with respect to property or valuable securities occurs when a person, by deception, dishonestly induces another to part with property or to create, alter, or destroy documents or instruments capable of being converted into valuable securities. The offence requires that the victim is misled into acting under a false belief, such as delivering money, signing instruments, or modifying documents, with the intention of causing wrongful gain to the offender or loss to the victim. This provision protects not only tangible property but also legal and commercial instruments, ensuring that fraudulent manipulation of documents like bonds, share certificates, or promissory notes is punishable. The essence of the offence lies in deception, dishonest inducement, and involvement of property or instruments of value, making any act that influences the victim under false pretences a criminally liable offence.

Examples:

• A person sells fake gold jewellery to a buyer by misrepresenting its purity. The buyer, deceived by the false claim, hands over money for the jewellery. Here, the offender dishonestly induces the victim to deliver property.
• An individual convinces the owner of a bond certificate to sign over the bond by falsely claiming it is required for government verification. The person then misappropriates or alters the certificate. This involves inducing the victim to make or alter a valuable security.
• A person fraudulently persuades a property owner to sign documents under the pretense of a legitimate transaction, but instead uses them to create unauthorized claims over property. This constitutes cheating by inducing alteration of signed or sealed instruments.
• A person pretending to be a bank official asks a customer to endorse blank checks or sign documents for “verification purposes,” intending to misuse them later. The victim is dishonestly induced to sign instruments capable of being converted into valuable securities.

Punishment for Cheating S. 318(4):

Imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

Nature of Offence:

The offence is Noncognizable, Bailable, and triable by Magistrate of the First Class.

Judicial Analysis:

In M/S. Medchl Chemicals & Pharma P. Ltd v. M/S. Biological E. Ltd., AIR 2000 SC 1869 case, the Supreme Court observed that while Section 415 IPC (S. 318(1) BNS) is an offence of cheating, Section 418 IPC (S. 318(3) BNS) deals with cheating with knowledge that wrongful loss may ensue to a person whose interest the offender is bound to protect and Section 420 IPC (S. 318(4) BNS) is cheating and dishonestly inducing delivery of property. In order to attract the provisions of Sections 418 IPC (S. 318(3) BNS) and 420 IPC (S. 318(4) BNS) the guilty intent, at the time of making the promise is a requirement and an essential ingredient thereto and subsequent failure to fulfil the promise by itself would not attract the provisions of Section 418 IPC (S. 318(3) BNS) or 420 IPC (S. 318(4) BNS).

In K R Kumaran vs State of Kerala, 28 October 1960 case, the Kerala High Court held that a person who was admitted in the hospital was checked by the doctor and the doctor knew that the person was in a condition that he won’t be able to survive. The doctor conspired with other accused to issue a life insurance policy for the person was going to die and in order to do so, he certified to be fit and healthy. This was done by accused in order to get the amount from the insurance company after the patient dies. The court held the accused liable for the offence of cheating and deceiving the insurance company in order to earn benefits. The accused was held guilty of cheating under IPC.

In Deepak Gaba v. State of Uttar Pradesh on 2 January, 2023 case, the Supreme Court observed that for the offence of cheating, there should not only be cheating, but as a consequence of such cheating, the accused should also have dishonestly adduced the person deceived to deliver any property to a person; or to make, alter, or destroy, wholly or in part, a valuable security, or anything signed or sealed and which is capable of being converted into a valuable security.

In A.M. Mohan v. The State Rep by SHO on 20 March, 2024 case, the Supreme Court held that the dishonest inducement is the sine qua non to attract the provisions of Sections 415 and 420 of IPC (S. 318 BNS).

Cheating by Personation:

Cheating by personation is a serious form of fraud that involves an individual falsely representing themselves as another person with the intent to deceive and gain an unfair advantage. This offence undermines trust in social, academic, and legal systems, as it often involves impersonation in examinations, financial transactions, or official procedures. With the advancement of technology and digital platforms, instances of personation have become more sophisticated and harder to detect, posing significant challenges to authorities. Understanding the nature, causes, and consequences of cheating by personation is essential to develop effective preventive measures and maintain integrity in various sectors of society.

Section 319 BNS:

Cheating by Personation:

(1) 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.

Illustrations:

(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.

(2) Whoever cheats by personation shall be punished with imprisonment of either description for a term which may extend to five years, or with fine, or with both.

Essential Ingredients of S. 319 BNS:

• Accused pretended to be some other person;
• He had knowledge that one person is substituted for another;
• Accused represented himself or another to be a person other than he or such other person really is.

Examples of Cheating by Personation:

• A represents himself to be B at the University examination. He got a hall ticket under B’s name and wrote papers in B’s name. He has committed the offence of cheating by personation because he represent himself to be some other person which he is not in reality.
• An individual sends someone else to attend an interview or skill test on their behalf to increase their chances of getting hired.
• A person logs into someone else’s social media or email account and pretends to be them to deceive others, spread false information, or gain personal benefits.
• Someone pretends to be another person—using fake documents or stolen identity—to withdraw money, take loans, or access bank accounts.
• An individual impersonates another person to obtain official documents such as passports, Aadhaar cards, or voter IDs.
• A person pretends to be the insured individual to falsely claim insurance benefits.
• In online education or certification exams, a candidate allows another person to take the test on their behalf using their login credentials.
• A person pretends to be a police officer, government official, or company representative to cheat or extort money from others.

In Sushil Kumar Datta vs State, 1985 CRILJ 1948 case, where the accused personated himself as a scheduled caste candidate and appeared for the examination of Indian Administrative Service. He was appointed in that cadre because of his false representation of being a scheduled caste. It was held by the Kolkata High Court that he was guilty of the offence of cheating by personation as he did not belong to scheduled caste and falsely represented himself as scheduled caste and hence, his conviction for cheating was held to be justified under the said section. 

In Queen-Empress v. Appasami, 1889 case, where A falsely represented himself to be B at a university examination, got a hall ticket under B’s name, and headed and signed answer papers to questions -with B’s name. The Court held that A committed the offences of forgery and cheating by personation.

Punishment for Offence under S. 319 BNS:

Imprisonment of either description for a term which may extend to five years, or with fine, or with both.

Nature of Offence under S. 319 BNS:

The offence is Cognizable, Bailable, Compoundable and triable by any Magistrate.

Conclusion:

Cheating under the Bharatiya Nyaya Sanhita, 2023 represents a comprehensive legal framework aimed at addressing both traditional and modern forms of deception. By clearly defining the essential elements—deception, dishonest or fraudulent intention, inducement, and resulting harm—the law provides a structured approach to protect individuals, property, and contractual or fiduciary interests. Special provisions, such as cheating by personation, misappropriation, or manipulation of valuable securities, highlight the legislature’s intent to tackle increasingly sophisticated methods of fraud in contemporary society. Understanding these provisions is crucial not only for legal practitioners but also for the public, as it reinforces the importance of vigilance, trust, and accountability in personal and commercial interactions.

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