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 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 (or any other person) in body, mind reputation or property, is said to “Cheat”. Section 415.
In order to constitute cheating it must be established that some one is made to part with some property on the promise of another to return something in lieu thereof which the latter had no intention to give. The initial intention to deceive, therefore must be established in order to justify conviction for cheating. Where there was a reasonable possibility that accused may be acting without dishonest intention there can be no conviction under this segment. In aim to trick can be assembled from surrounding circumstances.
Dishonest concealment of facts is a deception within meaning of Section 415. The essence of a charge of cheating is that the complainant should have been deceived. The acts of deceiving and thereby dishonestly or fraudulently inducing the person deceived are acts which must precede the delivery of any property.
Fraudulent or dishonest inducement
Whenever the words “fraud” or “with intent to defraud” or “fraudulently” occur in the meaning of a crime, two components at any rate are key to the commission of the crime,
- Deceit or an intention to deceive or , in some cases mere secrecy and
- Either actual injury or possible injury or an intention to expose some person either to actual injury or risk of possible injury by means of that deceit or secrecy. The term “fraudulently” may be defined to imply an intent to deceive in such a manner as to expose any person to loss, or risk of loss. The term “dishonestly” implies a deliberate intention to cause wrongful gain or wrongful loss.
Inducement by acts and conduct
To constitute an offense of tricking misleading may be by conduct or implied in the nature of the transaction itself.
Punishment for cheating
Whoever cheats shall be punished with imprisonment of either description for a term which may extend to one year, or with fine, or with both. Section 471.
Cheating and dishonestly inducing delivery of property
Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any individual, or to make, modify or crush the entire or any part of a valuable security, or a anything which is marked or fixed, and which is equipped for being changed over 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.
The ingredients of an offence under Section 420 are that the person deceived delivered to someone a valuable security or property, that the person to deceived was actuated to do along these lines, that such individual followed up on such prompting in consequence of his having been deceived by the accused, and that the accused acted fraudulently or dishonestly when so inducing that person. In other words the representation on the basis of which a person transferring property was induced to transfer his property must be false.
The person can be said to have done a thing dishonestly if the does so with the intention of causing wrongful gain to one person or wrongful loss to someone else. Wrongful increase to an individual means an addition to him by unlawful means of property to which the person gaining is not legally entitled. There are the two facets of the definition of dishonestly and it is enough to establish the existence of one of them. The law does not oblige that both ought to be established.
For a conviction under Section 420 criminal intent at the time of the offence must be established. Onus to establish means rea is on prosecution.
The test in cases of cheating is not what the accused did months a short time later, however what was in his psyche when he received the money, and the circumstances in which he did so and whether the accused then indented to pay what he promised to pay. Therefore a complaint under this section should show that intention of the accused was fraudulent from the very beginning.
For the purpose of cheating, dishonest intention at the time of performing an act or promise is to be inferred and not from subsequent non-fulfillment of the promise. Where dishonest intention at the time of the transaction was not clear, consequent behavior of the charged can't make the transaction amount to cheating.
Fraud and Misrepresentation
Question of criminality depends on intention of accused and the would be guilty of offence of fraud or misappropriation if he commits an act with intention to commit fraud or misappropriation. Where fraud is alleged, it is absolutely essential that there should be clear evidence of intention to defraud or to cheat before the opposite party may be allowed to be harassed with a criminal prosecution, because in absence of proof of means rea, no presumption can be drawn against accused and conviction recorded against him would not be sustainable. The misrepresentation intention is make a cheating so misrepresentation is a guilty of an offence under Section 420.
Concealment of facts
Every concealment of fact is not fraudulent. It becomes fraudulent only when it is dishonest and when it causes damage or loss to the other party. In a particular case the silence of the accused may be rendered into dishonest concealment by circumstances of the case and it may amount to deception within the section.
The word “to deliver any property” imply that the word ‘property’ means movable property. The fact that a thing is of on money value to the person who acquires it by cheating. Thus an import licence is property because though it is of on value in the hands of the licensing Authority yet it has great value in the hands of the licensee who acquires it by cheating.
A valuable security is a document which entitles a person or which evidences the title of a person to any property or valuable right. Therefore an import licence obtained from the officer of the Chief Controller of imports is a valuable security because it is evidence of title of the person possessing it to import foreign goods into Pakistan. But a “decree”, or receipt for goods delivered obtained by handing over a post-dated check, or the acknowledgement receipt of a protection parcel is not valuable security.
Cheating by agent
With regard to the offence punishable under section 420, P.P.C. the general principle would apply namely, that no criminal liability would attach to the principle for any act or omission of his agent unless the principle himself participates in, or approves or schemes at such act or omission.