This Article is written by Poornanand Ghali, A 4th year BA LLB. Student studying at K L E Society’s Law Collage Chikodi. This Article provides explanation about Cheating Laws in Bharatiya Nyaya Sanhita(BNS), 2023 and its penalties and Legal Framework.
Introduction
The Bharatiya Nyaya Sanhita (BNS), 2023 is a transformative legal framework enacted to modernize and replace the colonial-era Indian Penal Code (IPC), 1860. This new legislation reflects the changing socio-economic realities of contemporary India while ensuring clarity, fairness, and efficiency in the administration of criminal justice.
One of the key areas addressed under the BNS is the offense of cheating, which is codified under Section 318. This section elaborates on the legal definition of cheating, categorizes the offense based on its severity, and prescribes proportionate punishments.
The primary aim of incorporating cheating laws within the BNS is to curb deceptive practices that cause wrongful gain to one party while inflicting wrongful loss on another. With the rapid rise of financial transactions, digital engagements, and complex contractual relationships, the legal framework must address new forms of cheating and deception effectively.
Definition of cheating under BNS:
Section 318 of the BNS defines cheating as an act where a person, by deceiving another, either:
Definition of Cheating under Section 318
Fraudulently or dishonestly induces the deceived individual to:
- Deliver any property to any person, or
- Consent to the retention of any property by any person.
Intentionally induces the deceived individual to perform or omit an act they would not have otherwise done or omitted if not for the deception, resulting in or likely causing damage or harm to that person in body, mind, reputation, or property.
Legislative Framework on Cheating:
Section 318: 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 no 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:
The dishonest concealment of facts is a deception within the meaning of this section.
Ingredients or Elements of Cheating:
Deception: The accused must deceive the complainant fraudulently or dishonestly. Deception involves making false representations, concealing facts, or using any fraudulent method to trick the victim.
Inducement: After being deceived, the victim is induced to deliver property or act in a way that causes harm. This inducement could involve convincing the victim to transfer ownership or possession of property or perform an action they otherwise wouldn’t
Harm or Damage: The result of the act of cheating must lead to or be likely to cause harm or damage to the victim’s body, mind, reputation, or property. Harm could include:
- Financial Loss (Property)
- Physical Injury (Body)
- Emotional or psychological trauma(mind)
- Damage to the person’s social standing (reputation).
Fraudulent or Dishonest Intent:
Another important ingredient in cheating is fraudulent or dishonest intent. For an act to qualify as cheating, the deception must be carried out with a fraudulent or dishonest intent. The offender must have an intention to gain unfairly or cause loss to the victim.(Fraudulent intent refers to using deceit for personal gain, while dishonest intent involves acting with the knowledge that the victim will suffer harm or loss.)
Property: Property refers to anything of value that can be transferred or retained. It may include Movable or immovable property(such as land, vehicle, or goods), Intengible property. The person being deceived can either deliver this property to someone else or consent that another person unlawfully retains the property.
Act or Omission: Cheating can also include inducing the victim to do something they would not have done if they were not deceived.
Case Law: To hold person guilty of the offence of cheating it has to be shown that his intention was dishonest at the time of making the promise. Such a dishonest intention can be inferred from the mere fact that he could not subsequently fulfil the promise,(State of Kerala v. A.P.Pillai,(1972) 3 SCC 661
Illustration:
a) 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.
(b) 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.
(c) 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.
d) 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.
(e) 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.
(f) 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.
(g) 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.
Explanation using Example:
Example 1:
Sneha, a shop owner in Delhi, sells a piece of jewelry to Ramesh, claiming it is made of pure gold. In reality, the jewelry is gold-plated and not pure gold. Sneha intentionally deceives Ramesh into believing the jewelry is of higher value, and Ramesh pays a premium price for it. Sneha has committed cheating.
Example 2:
Vikram, a businessman in Bangalore, shows a fake sample of high-quality fabric to Anjali, a garment manufacturer, and convinces her to place a large order. When the actual fabric is delivered, it is of much lower quality than the sample shown. Vikram has intentionally deceived Anjali and has committed cheating.
Example 3:
Arjun, a resident of Kolkata, pledges a fake diamond ring to a pawnshop owner, Meera, claiming it is a real diamond. Meera lends Arjun money based on the belief that the ring is genuine. Arjun has intentionally deceived Meera and has committed cheating.
Example 4:
Rahul, a resident of Mumbai, falsely claims to be a government official and convinces Priya to sell him her car on credit, promising to pay her later. Rahul has no intention of paying Priya and disappears with the car. Rahul has committed cheating under Section 318 of the Bharatiya Nyaya Sanhita 2023.
Punishment for cheating:
Section 318(2) states that; Whoever cheats shall be punished with imprisonment of either description for term which may extend to three years, or with fine, or with both.
Section 318(3) states that; 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 seven years, or with fine, or with both.
Section 318(4) states that; whoever cheats and thereby dishonestly induses 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.
Classification of Cheating and Corresponding Punishments
Section 318 of the BNS classifies cheating into two major categories:
1. General Cheating (Simple Offense)
This applies to basic cases of cheating where deception leads to wrongful gain or loss but does not involve a special fiduciary duty or aggravating factors.
Examples:
- Misrepresenting facts to induce someone to transfer property.
- Falsely promising a job or service in exchange for money.
- Deceiving in minor commercial transactions.
Punishment for General Cheating:
Imprisonment: Up to 3 years (which may be simple or rigorous).
Fine: As decided by the court.
Both: In appropriate cases, both imprisonment and fine may be imposed.
Purpose: To deter everyday fraudulent practices and provide a legal remedy to victims.
2. Aggravated Cheating (Serious Offense)
Aggravated cheating involves special circumstances where the offender’s actions breach legal duties or cause more severe harm. This category applies to cases where the accused knows that their actions will result in wrongful loss to a person whose interests they are legally obligated to protect.
Examples:
- Cheating by a person in a position of trust (e.g., lawyer, financial advisor).
- Misappropriating funds in a fiduciary relationship (e.g., guardianship).
- Cheating involving government contracts or public property.
Punishment for Aggravated Cheating:
Imprisonment: Up to 5 years (which may be simple or rigorous).
Fine: As determined by the court.
Both: In severe cases, both imprisonment and a fine may be imposed.
Purpose: To impose stricter penalties for breaches of trust and protect vulnerable parties from exploitation
Digital Cheating under Bharatiya Nyaya Sanhita (BNS), 2023
With the rapid rise of digital technology and online transactions, digital cheating has become a growing concern. Recognizing the evolving nature of crime, the Bharatiya Nyaya Sanhita (BNS), 2023 introduces explicit provisions to address cheating through digital means under Section 318. This modern legal framework reflects the need to tackle emerging forms of deception that occur in cyberspace, such as online fraud, identity theft, and digital misrepresentation.
- Meaning:
Digital cheating refers to the act of deceiving another person using digital platforms or electronic means to induce them to transfer property, provide sensitive information, or engage in a transaction under false pretences.
- Elements of Digital Cheating under BNS:
Deception via Digital Means: Use of digital platforms (e.g., websites, mobile apps, social media) to mislead or deceive.
Inducement: Fraudulently inducing a person to transfer property or provide valuable information.
Dishonest or Fraudulent Intent: The offender must act with the intention to cause wrongful loss or gain.
Harm or Loss: The victim must suffer financial, reputational, or personal harm as a result of the deception.
Some Important Examples of Digital Cheating are:
Online Shopping Fraud: Deceiving customers by offering fake products or failing to deliver purchased items.
Phishing Scams: Sending fraudulent emails or messages to trick individuals into revealing sensitive information (e.g., passwords, credit card details).
Fake Investment Schemes: Using websites or digital platforms to lure victims into fraudulent investment plans.
Digital Identity Theft: Impersonating someone online to gain access to their property or finances.
Cyber Extortion: Threatening to release personal data unless a ransom is paid.
Key Differences: IPC vs. BNS on Cheating
| Aspect | IPC (Sec. 420) | BNS (Sec. 318) |
|---|---|---|
| Scope | Broad but lacks finer distinctions | Clear categorization of offenses. |
| Punishment (General) | Up to 7 years + fine | Up to 3 years + fine. |
| Punishment (Aggravated) | Specified statutory intent. | Up to 5 years + fine (higher penalty for fiduciary breach). |
| Digital Cheating | No explicit provision. | Explicitly covers online fraud. |
| Intent Requirement | Implied through case law. | Clearly specified statutory intent. |
Landmark Judicial Interpretations:
Several landmark judgments have shaped the understanding and application of cheating laws in India:
Vijay Kumar Ghai v. State of West Bengal (2022): The Supreme Court emphasized that for an offense under Section 420 IPC, there must be clear evidence of fraudulent or dishonest inducement leading to the delivery of property. Mere breach of contract does not constitute cheating unless fraudulent intent is present at the inception.
Rekha Jain v. The State of Karnataka and Ors. (2022): In this case, the Court highlighted that allegations of cheating must be substantiated with clear evidence of deception and fraudulent intent. The mere failure to fulfill a promise does not amount to cheating unless it is proven that there was dishonest intention at the time the promise was made.
Ramesh Kumar v. State of NCT of Delhi (2023): The Supreme Court observed a concerning trend where cheating cases under Section 420 IPC were being used as tools for money recovery in civil disputes. The Court cautioned against the misuse of criminal proceedings for settling civil disputes and emphasized the need for clear demarcation between civil fraud and criminal cheating.
Siddharth v. State of Uttar Pradesh (2023): The Supreme Court held that cheating through digital platforms is punishable under BNS, reinforcing the adaptability of the law to cyber fraud.
State of Maharashtra v. Amit Shah (2023): Clarified that corporate deception causing financial harm to stakeholders falls under aggravated cheating if pre-planned deception is proven.
Conclusion:
Section 318 of the Bharatiya Nyaya Sanhita, 2023, signifies a significant advancement in India’s legal framework concerning cheating offenses. By providing clear definitions and proportionate punishments, the BNS enhances the precision and effectiveness of legal proceedings related to deceptive practices.
This legislative evolution reflects India’s commitment to aligning its criminal justice system with contemporary needs and ethical standards. Also BNS provides clearer rules to handle both traditional and digital cheating.
This new law recognizes the impact of technology and includes digital fraud under its scope, ensuring that criminals who cheat using online methods are also punished. Understanding Section 318 of the BNS is crucial because it shows how criminal intent and deception must be proven to punish someone for cheating. It also highlights how law evolves to keep up with modern problems, such as cybercrime. This section helps to balance protecting victims while ensuring that innocent people are not wrongly punished.
