The Illusion of Guilt: Why Receiving Money from a Cheater Doesn’t Make You a Cheat Under Section 420 IPC

 Introduction

A common misconception in criminal law is that anyone who receives money in connection with a cheating transaction can be implicated as an accused under Section 420 of the Indian Penal Code. However, recent judicial pronouncements clarify a crucial distinction: receiving part of illegally obtained funds does not automatically transform a victim into an offender. This article examines the essential ingredients of Section 420 IPC and demonstrates how courts distinguish between perpetrators and victims even where financial connections exist.

The Essential Ingredients of Section 420 IPC

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Supreme court Judgment on essential ingredients of offences punishable U/S 409, 420 & 477A of IPC

 Ingredients necessary to prove a charge under Section 409 IPC:

41. Section 409 IPC pertains to criminal breach of trust by a public servant or a banker, in respect of the property entrusted to him. The onus is on the prosecution to prove that the accused, a public servant or a banker was entrusted with the property which he is duly bound to account for and that he has committed criminal breach of trust. (See: Sadupati Nageswara Rao v. State of Andhra Pradesh, ((2012) 8 SCC 547)).

42. The entrustment of public property and dishonest misappropriation or use thereof in the manner illustrated under Section 405 are a sine qua non for making an offence punishable under Section 409 IPC. The expression ‘criminal breach of trust’ is defined under Section 405 IPC which provides, inter alia, that whoever being in any manner entrusted with property or with any dominion over a property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property contrary to law, or in violation of any law prescribing the mode in which such trust is to be discharged, or contravenes any legal contract, express or implied, etc. shall be held to have committed criminal breach of trust. Hence, to attract Section 405 IPC, the following ingredients must be satisfied:
(i) Entrusting any person with property or with any dominion over property;
(ii) That person has dishonestly mis-appropriated or converted that property to his own use;
(iii) Or that person dishonestly using or disposing of that property or wilfully suffering any other person so to do in violation of any direction of law or a legal contract.

43. It ought to be noted that the crucial word used in Section 405 IPC is ‘dishonestly’ and therefore, it pre-supposes the existence of mens rea. In other words, mere retention of property entrusted to a person without any misappropriation cannot fall within the ambit of criminal breach of trust. Unless there is some actual use by the accused in violation of law or contract, coupled with dishonest intention, there is no criminal breach of trust. The second significant expression is ‘mis-appropriates’ which means improperly setting apart for ones use and to the exclusion of the owner.

44. No sooner are the two fundamental ingredients of ‘criminal breach of trust’ within the meaning of Section 405 IPC proved, and if such criminal breach is caused by a public servant or a banker, merchant or agent, the said offence of criminal breach of trust is punishable under Section 409 IPC, for which it is essential to prove that:
(i) The accused must be a public servant or a banker, merchant or agent;
(ii) He/She must have been entrusted, in such capacity, with property; and
(iii) He/She must have committed breach of trust in respect of such property.

45. Accordingly, unless it is proved that the accused, a public servant or a banker etc. was ‘entrusted’ with the property which he is duty bound to account for and that such a person has committed criminal breach of trust, Section 409 IPC may not be attracted. ‘Entrustment of property’ is a wide and generic expression. While the initial onus lies on the prosecution to show that the property in question was ‘entrusted’ to the accused, it is not necessary to prove further, the actual mode of entrustment of the property or misappropriation thereof. Where the ‘entrustment’ is admitted by the accused or has been established by the prosecution, the burden then shifts on the accused to prove that the obligation vis-à-vis the entrusted property was carried out in a legally and contractually acceptable manner.

Ingredients necessary to prove a charge under Section 420 IPC:

46. Section 420 IPC, provides that whoever cheats and thereby dishonestly induces a person deceived to deliver any property to any person, or to make, alter or destroy, the whole or any part of valuable security, or anything, which is signed or sealed, and which is capable of being converted into a valuable security, shall be liable to be punished for a term which may extend to seven years and shall also be liable to fine.

47. It is paramount that in order to attract the provisions of Section 420 IPC, the prosecution has to not only prove that the accused has cheated someone but also that by doing so, he has dishonestly induced the person who is cheated to deliver property. There are, thus, three components of this offence, i.e., (i) deception of any person, (ii) fraudulently or dishonestly inducing that person to deliver any property to any person, and (iii) mens rea of the accused at the time of making the inducement. It goes without saying that for the offence of cheating, fraudulent and dishonest intention must exist from the inception when the promise or representation was made.

48. It is equally well-settled that the phrase ‘dishonestly’ emphasizes a deliberate intention to cause wrongful gain or wrongful loss, and when this is coupled with cheating and delivery of property, the offence becomes punishable under Section 420 IPC. Contrarily, the mere breach of contract cannot give rise to criminal prosecution under Section 420 unless fraudulent or dishonest intention is shown right at the beginning of the transaction. It is equally important that for the purpose of holding a person guilty under Section 420, the evidence adduced must establish beyond reasonable doubt, mens rea on his part. Unless the complaint showed that the accused had dishonest or fraudulent intention ‘at the time the complainant parted with the monies’, it would not amount to an offence under Section 420 IPC and it may only amount to breach of contract.

Ingredients necessary to prove a charge under Section 477-A IPC:

49. The last provision of IPC with which we are concerned in this appeal, is Section 477A, which defines and punishes the offence of ‘falsification of accounts’. According to the provision, whoever, being a clerk, officer or servant, or employed or acting in that capacity, wilfully and with intent to defraud, destroys, alters, mutilates or falsifies any book, electronic record, paper, writing, valuable security or account which belongs to or is in possession of his employer, or has been received by him for or on behalf of his employer, or wilfully and with intent to defraud, or if he abets to do so, shall be liable to be punished with imprisonment which may extend to seven years. This Section through its marginal note indicates the legislative intention that it only applies where there is falsification of accounts, namely, book keeping or written accounts.

50. In an accusation under Section 477A IPC, the prosecution must, therefore, prove—(a) that the accused destroyed, altered, mutilated or falsified the books, electronic records, papers, writing, valuable security or account in question; (b) the accused did so in his capacity as a clerk, officer or servant of the employer; (c) the books, papers, etc. belong to or are in possession of his employer or had been received by him for or on behalf of his employer; (d) the accused did it wilfully and with intent to defraud.

Supreme Court

CHIEF JUSTICE OF INDIA N.V. RAMANA JUSTICE SURYA KANT JUSTICE HIMA KOHLI

N. Raghavender Vs. State of Andhra Pradesh, CBI

CRIMINAL APPEAL NO. 5 OF 2010

13th December 2021

Author: Surya Kant, J.

Citation: 2021 ALL SCR (ONLINE) 761

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Whether court can reject application for compounding of offence in offence of cheating?

Even in this appeal, it is argued by learned Counsel for the Appellant that in view of the provision Under Section 320 of the Code of Criminal Procedure, the offence Under Section 420 Indian Penal Code is compoundable with the permission of the court. It is further argued by learned Counsel, that while dismissing the application for compounding, High Court has dismissed the Criminal Revision also without considering the various grounds raised in the Revision Petition. It is further submitted that the alleged incident was of the year 1991-92, but the complaint was lodged belatedly on 05th of November 2004. Further it is submitted that Appellant is a senior citizen and the High Court has committed error in dismissing the Criminal Revision without considering the same on merits.

On the other hand, learned Counsel appearing for the State has submitted that, merely because an offence is compoundable Under Section 320 Code of Criminal Procedure, if the offence for which the Appellant is convicted has its adverse social impact on the society, it need not be compounded. It is further submitted that as much as Criminal Revision is also dismissed by the High Court, no case is made out in this appeal to interfere with the conviction recorded and sentence imposed on the Appellant.

10. Having heard the learned Counsel on both sides we have perused the impugned judgment and also other material placed on record. It was the case of the prosecution that in the beneficial scheme introduced for poor persons under residential scheme an amount of Rs. 9800/- was sanctioned during the year 1991-92 to the complainant. It is the specific case of the complainant that though she was to be paid entire Rs. 9800/-, but Appellant misled her and procured her signature and made payment of only Rs. 4000/- and he has utilised rest of the amount for himself for his personal benefit and gain. Merely because an offence is compoundable Under Section 320 Code of Criminal Procedure still discretion can be exercised by the court having regard to nature of offence, as such it is rightly held in the impugned judgment that as the offence for which Appellant was convicted and sentenced, it will have its own effect on the society at large. In view of the reasons recorded in the impugned order rejecting the application for compounding, it cannot be said that the High Court has committed any error in not accepting the application filed for compounding the offence.

IN THE SUPREME COURT OF INDIA

Criminal Appeal No. 465 of 2019

Decided On: 11.03.2019

 Bhagyan Das Vs.  The State of Uttarakhand and Ors.

Hon'ble Judges/Coram:

R. Banumathi and R. Subhash Reddy, JJ.

Citation: AIR 2019 SC 2032: 2019 (2) Crimes 27 : 2019 (2) KLJ 190 : 2019 (2) RCR (Criminal) 551 : (2019) 4 SCC 354

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Whether failure to pay Mobile postpaid user charges amounts to offence of cheating U/S 420 of IPC?

 The prosecution case as against the petitioner as per Annexure 1 report is that, he, after having obtained a mobile postpaid connection in his name, failed to discharge his liability for user charges for a period of 5 months from 21.7.2006 to 21.11.2006. The allegation is that the petitioner incurred a gross monetary liability of ` 97,678.5/- for the period and after making a part payment of ` 10,580/-, he kept the balance in arrears. The default on the part of the petitioner, according to the prosecution, amounts to an offence of cheating punishable under Section 420 of IPC.

3. The petitioner's case is that the transaction in question is based on an agreement between the parties and therefore the alleged liability under the transaction is purely of civil nature. In as much as what is made out is only a civil liability out of the transaction in question, the petitioner seeks the consequential criminal proceedings in C.C. No. 1518/2008 pursuant to the Annexure 1 final report, to be quashed.

5. On marshaling the materials on record, I find that the transaction involved as between the parties is one arising out of a civil dispute. The purported liability of the petitioner seems to have arisen from breach of promise or agreement other than a breach followed by any dishonest intention to cheat the de facto complainant. Mere breach of trust or agreement will not by itself amount to a criminal offence under Section 420 IPC. In order to make out an offence under Section 420, the prosecution has to show that the dishonest intention to cheat existed at the time when the alleged promise in question was made. That legal proposition does not match the materials on record as well as the allegations made out through the Annexure 1 report. Consequently being satisfied that what is involved in the present case is one of civil dispute between parties, I hold that this seems to be a fit case where the criminal proceedings pending before the Additional Chief Judicial Magistrate Court, Ernakulam requires to be quashed.

IN THE HIGH COURT OF KERALA AT ERNAKULAM

Crl. M.C. No. 1813 of 2014

Decided On: 08.03.2019

Abdul Hakkem P.V. Vs.  State of Kerala and Ors.

Hon'ble Judges/Coram:

T.V. Anil Kumar, J.

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When prosecution for cheating is liable to be quashed?

Even if all the allegations in the complaint taken at
the face value are true, in our view, the basic essential
ingredients of dishonest misappropriation and cheating
are missing. Criminal proceedings are not a short cut
for other remedies. Since no case of criminal breach of
trust or dishonest intention of inducement is made out
and the essential ingredients of Sections 405/420
Indian Penal Code are missing, the prosecution of the
Appellants Under Sections 406/120B Indian Penal
Code, is liable to be quashed.”
12. After hearing learned counsel for the parties and
perusing the record of the case as well as precedent laws cited at
Bar, this Court is of the opinion that the sum and substance of the
FIR was that at the time of agreement with the respondent No.2,
the property in question was already promised to be transferred to
one Chhoga Ram vide agreement dated 25.07.2012. It is an
admitted position which is also reflected in the case diary that
Chhoga Ram has during investigation deposed before the
investigating authority and stated that though he had entered into
an agreement on 25.07.2012 but after a compromise, he has
abandoned the agreement and vide compromise between the
parties on 25.04.2013, he has agreed to the proposition of the
petitioner that the agreement in question shall no more have any
impact upon the title of the petitioner. Thus, very basis of the FIR
is not found to be correct in the investigation and the investigating
authority has categorically pointed out that Chhoga Ram was not
having any claim over the property in question after 25.04.2013
whereas the agreement between the petitioner and respondent
No.2 had happened only on 08.09.2013 and at the very inception,
the petitioner was neither deceiving the respondent No.2 nor
inducing him by any of his act which would amount to an offence
as defined under Section 415 IPC.
13. Since, the offence under Section 415 IPC itself was not
made out, there is no question of offence under Section 420 IPC
being made out, as the basic ingredients of the alleged offence is
cheating and dishonest inducement, at the inception, for delivery
of property. Thus, even in the constrained jurisdiction under
Section 482 Cr.P.C. after seeing the precedent laws and observing
the facts, on the face of it, this Court finds that no offence is made
out.
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Criminal Misc(Pet.) No. 3723 / 2016
Jugal Kishore V The State of Rajasthan

HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
Order
24/08/2017

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Whether principle of double jeopardy is applicable in prosecution U/S 138 of NI Act and S 420 of IPC?

It is well settled law that when there is conflict
between ruling given by Division Bench and Larger Bench
then ruling given by Larger Bench always prevails. In view of
the ruling given by Constitutional Bench comprised of five
Judges i.e. AIR 1954 SC 375 title S.A. Venkataraman vs. Union of
India it is held that criminal offence under Section 420 IPC and
criminal offence under Section 138 of Negotiable Instrument
Act are distinct criminal offences. It is held that as offence
under Section 138 of Negotiable Instrument Act and offence
under Section 420 IPC are distinct criminal offences then

benefit of double jeoparady cannot be granted to revisionist
notwithstanding the fact that allegations of both criminal
complaints are substantially similar. It is held that ingredients
of offence under Section 420 IPC and 138 of Negotiable
Instrument Act are not similar. In view of above stated facts
point No.1 is answered in negative.
IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA

 Cr.Revision No. 170 of 2015

 Date of Order 13th April 2016

Rajeshwar Sabarwal son of Shri O.P. Sabarwal 
V
State of H.P.
Coram
The Hon’ble Mr. Justice P.S. Rana, J.

Citation: 2017 CRLJ1222

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When offence of cheating is made out against sanyasi?

In case of Sri Bhagwan Samardha Vrs. State of
A.P. and others reported in (1999) 5 Supreme Court Cases
740, it is held as follows:-25
“8. If somebody offers his prayers to God for
healing the sick, there cannot normally be any
element of fraud. But if he represents to another
that he has divine powers and either directly or
indirectly makes that other person believe that
he has such divine powers, it is inducement
referred to in Section 415 IPC. Anybody who
responds to such inducement pursuant to it and
gives the inducer money or any other article and
does not get the desired result is a victim of the
fraudulent representation. The Court can in such
a situation presume that the offence of cheating
falling within the ambit of Section 420 IPC has
been committed. It is for the accused, in such a
situation to rebut the presumption.

IN THE HIGH COURT OF ORISSA, CUTTACK
BLAPL NO. 7367 of 2015

Surendranath Mishra V State of Odisha 

P R E S E N T:-
 MR. JUSTICE S.K. SAHOO
 Date of order: 25.05.2016

Citation: 2017 CRLJ30

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Whether misappropriation of public funds is done by public servant by obtaining more money from public otherwise than legal dues?

The sum of Rs. 398/4/6 correctly realised from the cultivators by the applicant as canal d

ues thus came into his hands as a trustee on behalf of the State Government & the findings of fact show that he discharged that trust properly by depositing that amount in the Government treasury. So far as the balance of Rs. 198/9/6 is concerned, that amount was never due to the Government. It was, therefore, never the property of the Government at any stage When the applicant realised this sum of money, it did not become Government property, nor did he ever become its trustee on behalf of the Government.

At the same time, he could not become the trustee of this money on behalf of the cultivators from whom he realised this money because, when they handed over the money to the applicant, they purported to surrender all their rights in that money. Their intention was that the money should go to the Government and it was in pursuance of that intention and for its fulfilment that they handed over the money to the applicant. Thereafter, therefore, it cannot be said that the money was held by the applicant as a trustee on their behalf.

The cases, where a person hands over his property to another intending to retain his rights in that property, are totally distinguishable from the present case. In cases, where the right in the property is retained by the person who hands over the property to another person who misappropriates it, the question of an offence of criminal breach of trust being committed may arise, even though the entrustment of the property may have been obtained by wrongful representations.

In such a case, it is possible that two different offences -- one of committing criminal breach of trust and another of cheating by obtaining delivery of the property by false representations --may have been committed and it may" be possible to convict the person committing the acts for any one of those offences or both of them. In a case like the present one, where the money was realised by the applicant representing that the amount was due as canal dues, no entrustment of the property with the applicant, either on behalf of the State or on behalf of the persons who paid the money, came into existence.

The only offence, which, on these facts, the applicant can be held liable for, is the offence of cheating and obtaining delivery of property by commission of that offence which would be punishable under Section 420, Penal Code. We may say with respect that the remarks made by the Full Bench of the Madras High Court in Emperor v. John Melver, AIR 1936 Mad 353 (A) and the remarks made by the Law Lords in Lake v. Simmons, 1927 AC 487 . (B) support our view. In such a case as the present one, the appropriate provision of law is only Section 420, Penal code, where Section 409, Penal Code, cannot apply at all.

Allahabad High Court

Surendra Pal Singh vs The State on 18 September, 1956

Equivalent citations: AIR 1957 All 122, 1957 CriLJ 170

Bench: V Bhargava, Sahai

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When power of attorney holder can be prosecuted for offence U/S 409 or S 420 of IPC?

Admittedly, in this case the accused/petitioner was the power of Attorney Holder of the firm/Kirti Electricals, of which his brother is said to be the proprietor. The petitioner submitted the quotation on behalf of firm for supply of Generator set. Entire quotation amount of Rs. 2,60,000/- was handed over to the accused-petitioner by way of Bank Draft and he received the Bank Draft on behalf of the firm being its power of attorney holder. He himself deposited the amount in the Bank account of the firm which was being operated by him and also withdrew the entire amount, thereafter closed the Bank account. The Generator set, which was supplied, was defective and delivered in broken condition and immediately thereafter when the defective condition of the Generator was brought to the notice, the same was taken back by the supplier. But in spite of repeated requests the petitioner did not take any step for supply of new Generator set by way of replacement of the broken/defective Generator set nor returned back the amount received by him. As such, the petitioner having got himself fully involved in the matter may be as a power of attorney holder, cannot get himself absolved of both his civil as well as criminal liability.

Orissa High Court

Jayendra C. Shah @ Jayendra Ch. ... vs State Of Orissa on 9 November, 2005

Equivalent citations: 2006 CriLJ 847, 2005 II OLR 737,CLT(2006)Supp.Crl.16

Bench: N Prusty

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Whether offence of S 406 or S 420 of IPC is made out if there is breach of contract?

In my view, the complainant also has not established that the accused from the inception had an intention to adduce the complainant to deliver the property and from the inception intended to cheat the accused. The complainant has relied on the fact that apart from paying the marginal money no installment was paid by the accused and from this an inference could be drawn about the intention of the accused. Reliance was placed on Illustration F to Section 415 and was submitted that this case was squarely covered under the said illustration. It is not possible to accept the submission of the learned counsel appearing on behalf of the appellant. In my view, there is no evidence on record from which an inference could be drawn that the accused from the inception had intended to cheat the complainant. In a case where there is a breach of an agreement executed between the parties merely because there is a breach and several amounts which are due and payable by one party to the other are not paid it cannot be said that the offence punishable under Section 420 or that the offence of criminal breach of trust is committed by the accused. There are catenas of judgments of the Supreme Court and this Court wherein it has been observed that in order to attract the provisions of Section 406 or Section 420 of the Indian Penal Code the ingredients of the said offence have to be established. It is no doubt true that in a given case of a breach of contract a prosecution could be launched under the provisions of Section 406 or Section 420 and at the same time simultaneously a civil suit could also be filed. However, this is not always true and in order to establish that the breach of contract had resulted into an offence punishable under Sections 406 or 420 of the Indian Penal Code there should be sufficient material on record on the basis of which such inference can be drawn. In my view, from the evidence on record, it is not possible to draw such an inference.

Bombay High Court

National Small Industries Corpn. ... vs Samudra Corporation And Anr. on 17 August, 2005

Bench: V Kanade

Citation;2005 CRLJ 3432 Bom

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Whether sale of truck by accused before repayment of loan amounts to offence U/S 420 of IPC?

PENAL CODE - Section 420--Cheating--Complainant--advancing Rs. 20,000/- on execution of pronote for purchasing truck-Orally agreed not to sell truck till loan is repaid-Accused selling truck before repayment-Held, complainant was not defrauded to part with Rs. 20,000/-It is a case of breach of agreement and civil liability is incurred-Charge of cheating is quashed.

On 13th June, 1980, the petitioner obtained a loan of Rs. 20,000/- from the complainant and executed a pronote in favour of the complainant and at the time of the execution of the said pro-note, it was orally agreed that so long as the petitioner did not repay the aforesaid amount of loan, the petitioner would not take his share of the income from the truck and it was also agreed that so long as the petitioner did not repay the amount of the pronote, he would not be entitled to sell the truck and that the aforesaid agreement was also re-evolved on the back of the pronote.

The allegations contained in the complaint, do not make out the case that at the time when the complainant advanced the sum of Rs. 20,000/- to the petitioner, the petitioner had deceived the complainant by fraudulently including the complainant to advance the loan of Rs. 20,000/- to the petitioner & that but for the aforesaid inducement, the petitioner would not have paid the sum of Rs. 20,000/- to the complainant.

The petitioner in selling the truck before repaying the amount of the loan of Rs. 20,000/-, has committed breach of the agreement, which is said to have been entered into between the complainant and the petitioner on 13th June, 1980 when the complainant advanced the loan of Rs. 20,000/-to the petitioner. The aforesaid alleged breach of the agreement may give rise to civil liability but it would not give rise to any criminal liability.

Petition Allowed

Equivalent Citation: 1982WLN(UC)195

IN THE HIGH COURT OF RAJASTHAN

S.B. Criminal Misc. Petition No. 123/82

Decided On: 30.07.1982

Kayhaiya Lal Vs.  The State of Rajasthan

Hon'ble Judges/Coram:
S.C. Agrawal, J.
Equivalent Citation: 1982WLN(UC)195

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Whether dishonest inducement to deliver property amounts to cheating punishable U/S 420 of IPC?

Learned counsel contended that no offence of cheating can be discerned from the allegations, particularly in view of the admitted fact that the complainant reposed faith only in the divine powers which appellant would only have offered to invoke through rituals and prayers. If somebody offers his prayers to God for healing the sick, there cannot normally be any element of fraud. But if he represents to another that he has divine powers and either directly or indirectly makes that another person believe that he has such divine powers, it is inducement referred to Section 415 of the IPC. Anybody who responds to such inducement pursuant to it and gives the inducer money or any other article and does not get the desired result is a victim of the fraudulent representation. Court can in such a situation presume that the offence of cheating falling within the ambit of Section 420 of the IPC has been committed. It is for the accused, in such a situation, to rebut the presumption. So the contention that the allegations do not disclose an offence under Section 420 of the IPC has to be repelled and we are of the opinion that the Magistrate has rightly taken cognizance of the said offence.
Criminal - cheating - Sections 415, 417 and 420 of Indian Penal Code, 1860 - offering prayers to God and performing 'yagna' for healing of sick and receiving money in consideration - false representation that one has divine powers amounts to offence of cheating under Sections 415 and 420 - held, mere offering of prayers to God for healing the sick is not fraud but receiving consideration representing possession of divine powers attracts Section 415 and 417.

Supreme Court of India

Sri Bhagwan Samardha Sreepada ... vs State Of Andhra Pradesh & Ors on 15 July, 1999

Bench: M.B.Shah, K.T.Thomas

Citation;AIR1999SC2332,1999CriLJ3661,

 1999(3)Crimes117(SC),(1999)5SCC740, 

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Whether Magistrate can frame alternative charge U/S 420 of IPC along with charge U/S 409 of IPC?

 The third contention raised on behalf of the revision applicant is that the learned Chief Judicial Magistrate has ordered to frame a charge under Sections 406, 408 and 409 as well as under Section 420 read with Section 114 of I.P.C. It is vehemently urged before me that the offences punishable under Sections 406 to 409 and offence under Section 420 cannot go together. The applicant has come before this Court before the actual framing of the charge against him and only after the order of framing the charge is passed. It must be mentioned that it is always open for a criminal Court to frame charges alternatively. A person can alternatively be charged under Sections 406 to 409 or under Section 420, I.P.C. It is true that the ingredients of Sections 406 to 409 and the ingredients of Section 420 are required to be considered. The offence under Sections 406, 408 or 409 and the offence under Section 420 could not go together. But if the alternative charge is framed, it could not be said that an alternative charge is illegal or invalid. In the case of Sunil Kumar Paul v. State of West Bengal AIR 1965 SC 706 :1965 (1) Cri LJ 630 the charge-sheet was framed against the accused only under Section 409, but the Appellate Court had found the accused guilty of the offence punishable under Section 420 instead of Section 409 and had convicted the accused under that Section and the said decision has been approved by the Apex Court by observing as under :-

Where a public servant was charged and tried by the Special Court for an offence under Section 409, I.P.C, but a charge under Section 420, I.P.C. could have been framed by the Special Court under Section 236, Cr. P.C. on the basis of the allegations in the charge-sheet, the trial Court or the appellate Court can, in law, convict the accused of that offence instead of an offence under Section 409, I.P.C. if it be of the view that the offence of cheating had been established. This would be in accordance with the provisions of Section 237, Cr.P.C.

Therefore, the learned Judicial Magistrate will have to bear in mind the ingredients of 406 to 409 as well as the ingredients Section 420 and then to consider as to whether the present revision applicant would be alternatively charged under Sections 406 to 409 and Section 420, IPC.

Equivalent Citation: 1998CriLJ216, 1997GLH(2)394

IN THE HIGH COURT OF GUJARAT

Criminal Misc. Appln. No. 970 of 1987

Decided On: 25.04.1997

 Ranjitkumar Chakravarti Vs. Co-operative Bank of Baroda Ltd. and Ors.

Hon'ble Judges/Coram:
S.D. Pandit, J.

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When offence of cheating U/S 420 of IPC is not made out?

 From the decisions cited by the appellant, the
settled proposition of law is that every breach of
contract would not give rise to an offence of cheating
and only in those cases breach of contract would
amount to cheating where there was any deception
played at the very inception. If the intention to cheat
has developed later on, the same cannot amount to
cheating. In other words for the purpose of constituting
an offence of cheating, the complainant is required to
show that the accused had fraudulent or dishonest
intention at the time of making promise or
representation. Even in a case where allegations are
made in regard to failure on the part of the accused to
keep his promise, in the absence of a culpable intention
at the time of making initial promise being absent, no
offence under Section 420 of the Indian Penal Code can
be said to have been made out.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.2341 OF 2011
Vesa Holdings P. Ltd. & Anr. …

versus
State of Kerala & Ors. …
Citation;(2015) 8 SCC293

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Whether Advocate can be held liable for prosecution U/S 420 of IPC?

In Pandurang Dattatraya Khandekar vs. Bar
Council of Maharashtra & Ors. (1984) 2 SCC 556,
this Court held that “…
“8. There is a world of difference between the
giving of improper legal advice and the giving of
wrong legal advice. Mere negligence
unaccompanied by any moral delinquency on the
part of a legal practitioner in the exercise of his
profession does not amount to professional
misconduct.”
 Therefore, the liability against an opining
advocate arises only when the lawyer was an active
participant in a plan to defraud the Bank. In the
given case, there is no evidence to prove that A-6
was abetting or aiding the original conspirators.
However, it is beyond doubt that a lawyer owes
an “unremitting loyalty” to the interests of the client
and it is the lawyer’s responsibility to act in a
manner that would best advance the interest of the
client. Merely because his opinion may not be
acceptable, he cannot be mulcted with the criminal
prosecution, particularly, in the absence of tangible
evidence that he associated with other conspirators.
At the most, he may be liable for gross negligence or
professional misconduct if it is established by
acceptable evidence and cannot be charged for the
offence under Sections 420 and 109 of IPC along
with other conspirators without proper and
acceptable link between them. It is further made
clear that if there is a link or evidence to connect
him with the other conspirators for causing loss to
the institution, undoubtedly, the prosecuting
authorities are entitled to proceed under criminal
prosecution. Such tangible materials are lacking in

the case of the respondent herein.”
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CRIMINAL APPLICATION NO. 102 of 2012


RAMESHBHAI VALLABHBHAI KORAT. V  STATE OF GUJARAT & 1.

CORAM:  MR.JUSTICE R.D.KOTHARI
Date : 24/07/2014
Citation; 2015(3) Crimes 524 GUJ

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Whether charge can be amended to correct amount misappropriated and embezzled ?

A charge serves the purpose of notice or intimation to the accused drawn up according to specific language of law giving clear and unambiguous or precise notice of the nature of accusation that the accused is called upon to meet in the course of a trial. The object of a charge is to warn an accused person of the case he is to answer. It cannot be treated as if it was a part of ceremonial. Gainful reference for the purpose may be made on the case of V.C. Shukla Vs. State, reported in 1980 SCC (Cri.)

695. The Criminal Procedure Code gives ample power to the court to alter or amend a charge provided that the accused has not to face a charge for the new offence or is not prejudiced either by keeping him in dark about that charge or in not giving him a full opportunity to meet it andputting forward any defence open to him on the charge finally preferred against him.

In the instant case, a charge had already been framed showing the accused to have defalcated and embezzled an amount of Rs.5,24,610/-. However, after the completion of full accounting it transpired that the actual amount defalcated and embezzled was Rs.44,40,323/- and this actual amount of defalcation and embezzlement was sought to be incorporated in place of the original amount of Rs.5,24,610/- . Apparently, no altercation or modification in the charge was sought and merely the amount misappropriated and embezzled was sought to be rectified. Therefore, there was no new fact being introduced or charge being framed. The accused party had notice of the amount of embezzlement and defalcation that had been fastened upon him and mere change of the amount does not amount to an alteration and modification of the charge. So far as the question of marking the document is concerned, the reasonings assigned by the Revisional Court are cogent and are upheld.

Patna High Court - Orders

Rajnikant Rakesh vs State Of Bihar & Anr on 6 February, 2009

Citation; 2009 CRLJ2149 Patna

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Issue of false certificate -when offence U/S 420 of IPC is not made out?

Criminal - Conviction - Challenge thereto - Sections 177 and 420 of Indian Penal Code, 1860 - Present appeal filed against order whereby Appellant was convicted for offences of cheating and furnishing false information - Whether conviction and sentence of Appellant under Sections 420 and 177 of Code was sustainable - Held, Appellant being Sarpanch of Gram Panchayat issued false certificate in favour of Co-Accused that he did not own any land except land which he made fit for cultivation - Appellant furnished information which he knew to be false - Therefore, ingredients of Section 177 of Code were proved - However, there was no evidence to show that there was such fraudulent dishonest intention on part of Appellant in issuing certificate - Issuance of false certificate could not be said to be with dishonest intention to make wrongful gain for himself - Therefore, conviction of Appellant under Section 420 of Code could not be sustained and same was set aside - Appeal disposed of. 


SUPREME COURT OF INDIA
(T.S. THAKUR AND R. BANUMATHI, JJ.)
BISHAN DAS

VERSUS
STATE OF PUNJAB AND ANR.
Respondents
Criminal Appeal No. 1837 of 2014 (Arising out of S.L.P. (Crl.) No. 2331/2014)-Decided on 26-8-2014.
Citation;2015CriLJ281, 2014(4)Crimes181(SC),2015 ALLSCR861

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Whether prosecution U/S 420 of IPC is maintainable even if accused is convicted u/s 138 of NI Act?

Learned counsel for the appellant submitted that the appellant was already convicted under Section 138 of the Negotiable Instruments Act, 1881 and hence he could not be again tried or punished on the same facts under Section 420 or any other provision of IPC or any other statute. We find force in this submission.

Thus, it can be seen that Section 300(1) of Cr.P.C. is wider than Article 20(2) of the Constitution. While, Article 20(2) of the Constitution only states that 'no one can be prosecuted and punished for the same offence more than once', Section 300(1) of Cr.P.C. states that no one can be tried and convicted for the same offence or even for a different offence but on the same facts. In the present case, although the offences are different but the facts are the same. Hence, Section 300(1) of Cr.P.C. applies. Consequently, the prosecution under Section 420, IPC was barred by Section 300(1) of Cr.P.C. The Appeal is allowed and the impugned judgment of the High Court is set aside.

Supreme Court of India

Kolla Veera Raghav Rao vs Gorantla Venkateswara Rao And ... on 1 February, 2011

Bench: Markandey Katju, Gyan Sudha Misra

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