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KembaraXtra - Bharatiya Nyaya Sanhita - Section 318: Cheating
Q1. What does Section 318 of the Bharatiya Nyaya Sanhita provide?
Answer:
Section 318 of the Bharatiya Nyaya Sanhita, 2023 (BNS) defines and punishes the offence of cheating.
Broadly, a person cheats when, by deceiving another person, he:
- Fraudulently or dishonestly induces the person deceived to deliver property to any person;
- Fraudulently or dishonestly induces the person to consent to another person retaining property; or
- Intentionally induces the person deceived to do or omit to do something which he would not have done or omitted if he had not been deceived, and that act or omission causes or is likely to cause damage or harm to the person's:
- Body;
- Mind;
- Reputation; or
- Property.
The Explanation expressly provides that dishonest concealment of facts is itself deception for the purposes of Section 318.
Q2. What is the basic concept of cheating?
Answer:
Cheating involves deception followed by inducement.
The offender creates a false belief in the victim and, because of that false belief, causes the victim to:
- Deliver property;
- Permit property to be retained;
- Do something which the victim would otherwise not have done; or
- Omit to do something which the victim would otherwise have done.
The supplied comments emphasise that the dishonest or fraudulent intention must generally exist from the beginning of the transaction.
Therefore, the basic formula may be expressed as:
Deception + dishonest/fraudulent intention + inducement + required consequence = Cheating
Q3. Which IPC provisions correspond to Section 318 BNS?
Answer:
According to the supplied comments:
- Section 318(1) BNS → Section 415 IPC
- Section 318(2) BNS → Section 417 IPC
- Section 318(3) BNS → Section 418 IPC
- Section 318(4) BNS → Section 420 IPC
The basic definition of cheating remains substantially unchanged, but the BNS increases the punishment for certain forms of cheating.
Q4. What are the essential ingredients of cheating?
Answer:
The principal ingredients are:
1. Deception of a person;
2. Dishonest, fraudulent or intentional inducement resulting from that deception;
3. The victim must thereby:
o Deliver property;
o Consent to retention of property;
o Do something; or
o Omit to do something;
4. In cases involving an act or omission, it must cause or be likely to cause damage or harm to:
o Body;
o Mind;
o Reputation; or
o Property;
5. The required dishonest or fraudulent intention must exist at the relevant time, particularly when the representation or promise is made.
Both the physical conduct and guilty mental state are therefore essential.
Q5. What is meant by deception?
Answer:
Deception involves causing another person to believe something that is false or misleading.
It may occur through:
- False statements;
- False representations;
- False promises;
- Conduct;
- Misrepresentation;
- Dishonest concealment of facts; or
- Other deceptive behaviour.
Deception is the starting point of cheating.
Without deception, the basic offence of cheating cannot ordinarily be established.
Q6. What is meant by dishonest concealment of facts?
Answer:
The Explanation to Section 318(1) expressly states:
Dishonest concealment of facts is deception.
Therefore, deception does not always require an express false statement.
A person may deceive another by deliberately hiding a material fact where the concealment is dishonest.
The supplied comments further explain that the concealment must have the necessary dishonest character. Not every failure to disclose information automatically constitutes cheating.
Q7. Can silence amount to deception?
Answer:
According to the supplied comments, dishonest concealment may amount to deception even where the accused does not expressly make a false statement.
The crucial issue is whether the silence or concealment is dishonest and operates as deception.
Thus, deception may arise not only through what a person says, but also through what he deliberately conceals.
Q8. What is meant by inducement in cheating?
Answer:
Inducement is the second important stage of the offence.
After deceiving the victim, the accused must cause the victim to:
- Deliver property;
- Consent to property being retained;
- Do something; or
- Omit to do something.
The victim's action or omission must result from the deception.
Therefore:
Deception must lead to inducement.
Mere deception without the required inducement does not by itself complete the offence of cheating as described in Section 318.
Q9. Why must there be a connection between deception and inducement?
Answer:
The victim must act or omit to act because of the deception.
If the victim's conduct is entirely unrelated to the accused's false representation, the necessary connection may be absent.
The sequence is therefore important:
False representation or concealment → deception → inducement → victim's act/omission or delivery of property
Q10. What role does mens rea play in cheating?
Answer:
Mens rea is a central element of cheating.
The accused must possess the required dishonest or fraudulent intention when making the representation or promise that induces the victim.
The supplied comments repeatedly emphasise that a mere promise which is later broken does not automatically establish cheating.
It must be shown that the accused had the dishonest or fraudulent intention from the beginning.
Q11. Why must dishonest intention generally exist from the beginning?
Answer:
This requirement distinguishes criminal cheating from a mere subsequent failure to perform an obligation.
Suppose A promises to deliver goods to B and receives payment.
If A never intended to deliver the goods and made the promise merely to obtain B's money, cheating may be established.
But if A genuinely intended to perform the contract when the money was received and only later became unable or unwilling to perform it, the matter may amount to a breach of contract rather than cheating.
Q12. Explain Illustration (a): False claim of being in the Civil Service.
Answer:
A falsely pretends to be in the Civil Service.
By this false representation, A intentionally deceives Z and dishonestly induces Z to provide goods on credit.
A never intends to pay for those goods.
A cheats.
The illustration demonstrates:
- False representation;
- Deception;
- Dishonest intention;
- Inducement; and
- Delivery of property on credit.
Q13. Explain Illustration (b): Counterfeit manufacturer's mark.
Answer:
A puts a counterfeit mark on an article.
This causes Z to believe that the article was manufactured by a celebrated manufacturer.
Because of that false belief, Z purchases and pays for the article.
A cheats.
The deception concerns the origin or manufacturer of the goods, and the deception dishonestly induces the victim to part with money.
Q14. Explain Illustration (c): False sample.
Answer:
A shows Z a false sample of an article.
A intentionally causes Z to believe that the goods being sold correspond with the sample.
Z relies upon the sample and purchases the goods.
A cheats.
The false sample is the instrument of deception which induces the transaction.
Q15. Explain Illustration (d): Bill expected to be dishonoured.
Answer:
A purchases an article and tenders a bill drawn on a house where A has no money.
A expects that the bill will be dishonoured and intends not to pay.
By tendering the bill, A intentionally deceives Z and dishonestly induces Z to deliver the article.
A cheats.
The important feature is that A's dishonest intention exists when the transaction takes place.
Q16. Explain Illustration (e): False diamonds.
Answer:
A pledges articles as diamonds even though A knows that they are not diamonds.
A thereby deceives Z and dishonestly induces Z to lend money.
A cheats.
This illustrates cheating through deliberate misrepresentation concerning the quality or nature of property.
Q17. Explain Illustration (f): Loan obtained without intention to repay.
Answer:
A causes Z to believe that A intends to repay money lent by Z.
In reality, A has no intention of repaying the loan.
Because of A's false representation, Z lends the money.
A cheats.
The decisive factor is that the intention not to repay existed when A induced Z to make the loan.
Q18. Explain Illustration (g): Promise to deliver indigo.
Answer:
This illustration is particularly important for distinguishing cheating from breach of contract.
A induces Z to advance money by representing that A will deliver a certain quantity of indigo plant.
If A never intended to deliver it at the time he obtained the money, A cheats.
However, if A genuinely intended to deliver the indigo when the agreement was made but subsequently failed to do so, A does not cheat merely because of that later breach.
In the latter situation, A may instead be liable in a civil action for breach of contract.
Q19. Explain Illustration (h): False representation of contractual performance.
Answer:
A has entered into a contract with Z.
A falsely represents that he has already performed his part of the contract, although he has not.
Because Z believes the representation, Z pays money to A.
A cheats.
The deception concerns an existing fact—whether A has actually performed his contractual obligation.
Q20. Explain Illustration (i): Selling property twice.
Answer:
A sells and conveys an estate to B.
A therefore knows that he no longer has a right to that property.
Nevertheless, A later sells or mortgages the same property to Z without disclosing the earlier transfer to B and obtains money from Z.
A cheats.
This illustration is also an example of dishonest concealment of a material fact.
Q21. What is misrepresentation in the context of cheating?
Answer:
Misrepresentation involves making a false representation that causes another person to form an incorrect belief.
For criminal cheating, however, mere falsity is not enough.
The supplied comments emphasise that the false representation must be accompanied by dishonest or fraudulent intention.
Therefore, an innocent statement that later turns out to be incorrect does not automatically constitute cheating.
Q22. Is a wilful misrepresentation alone sufficient?
Answer:
Not necessarily.
It must also be established that the accused possessed the necessary dishonest or fraudulent intention.
An important question is whether the accused:
- Knew the representation was false; and
- Used it dishonestly or fraudulently to deceive the victim.
The mental element therefore gives the misrepresentation its criminal character.
Q23. What did V.Y. Jose v. State of Gujarat explain?
Answer:
In V.Y. Jose v. State of Gujarat, (2009) 3 SCC 78, the supplied comments emphasise that fraudulent or dishonest intention must exist when the promise or representation is made.
Misrepresentation from the beginning is an essential element of cheating.
The case therefore reinforces the principle that a later failure to perform a promise does not automatically convert a civil dispute into a criminal offence.
Q24. What is the punishment for general cheating under Section 318(2)?
Answer:
Section 318(2) provides that whoever cheats shall be punished with:
- Imprisonment of either description for a term which may extend to three years; or
- Fine; or
- Both.
According to the supplied comments:
Section 318(2) BNS → Section 417 IPC
The maximum imprisonment has been increased:
1 year → 3 years
Q25. What does Section 318(3) deal with?
Answer:
Section 318(3) deals with a more serious form of cheating where the offender knows that the cheating is likely to cause wrongful loss to a person whose interest in the transaction the offender was legally or contractually bound to protect.
The duty may arise:
- By law; or
- By a legal contract.
The provision therefore applies particularly where the accused occupies a position involving a duty to safeguard another person's interests.
Q26. What are the essential ingredients of Section 318(3)?
Answer:
The essential requirements are:
1. The accused must commit cheating.
2. The accused must know that the cheating is likely to cause wrongful loss.
3. The wrongful loss must concern a person whose interest is involved in the relevant transaction.
4. The accused must have been bound to protect that person's interest:
o By law; or
o By legal contract.
The existence of a special duty makes the cheating more serious.
Q27. Who may fall within Section 318(3)?
Answer:
According to the supplied comments, examples of persons who may occupy such positions include:
- Trustees;
- Agents;
- Guardians;
- Attorneys;
- Managers of Hindu families;
- Company executives;
- Bank officials; and
- Other persons who are legally or contractually bound to protect another person's interests.
The precise liability will depend upon the facts and the existence of the necessary duty and dishonest intention.
Q28. What are examples of fiduciary or trust-based relationships relevant to Section 318(3)?
Answer:
The supplied comments give examples such as:
- Banker and customer;
- Principal and agent;
- Guardian and ward;
- Company director and shareholders; and
- Advocate and client.
The important feature is that one person is under a legal or contractual obligation to protect the other's interest in the relevant transaction.
Q29. What is the punishment under Section 318(3)?
Answer:
The punishment is:
- Imprisonment of either description for a term which may extend to five years; or
- Fine; or
- Both.
According to the supplied comments:
Section 318(3) BNS → Section 418 IPC
The maximum imprisonment has increased:
3 years → 5 years
Q30. What does Section 318(4) provide?
Answer:
Section 318(4) deals with aggravated cheating where the offender cheats and thereby dishonestly induces the person deceived to:
- Deliver property to any person;
- Make the whole or part of a valuable security;
- Alter the whole or part of a valuable security;
- Destroy the whole or part of a valuable security; or
- Make, alter or destroy something signed or sealed which is capable of being converted into a valuable security.
The punishment is imprisonment of either description for a term which may extend to seven years, and the offender is also liable to fine.
Q31. Which IPC provision corresponds to Section 318(4)?
Answer:
According to the supplied comments:
Section 318(4) BNS → Section 420 IPC
The language and punishment have been retained substantially unchanged.
Q32. What distinguishes Section 318(4) from general cheating under Section 318(2)?
Answer:
Section 318(2) provides the general punishment for cheating.
Section 318(4) applies where cheating results in the dishonest inducement of the victim to:
- Deliver property; or
- Deal with a valuable security in one of the specified ways.
Therefore, Section 318(4) represents an aggravated form of cheating involving property or valuable security.
It carries the substantially higher maximum punishment of seven years plus fine.
Q33. What is the punishment under Section 318(4)?
Answer:
The punishment is:
- Imprisonment of either description for a term which may extend to seven years; and
- Fine.
The wording provides that the offender shall also be liable to fine.
Q34. What is the classification of Sections 318(2) and 318(3)?
Answer:
According to the supplied classification, offences under Sections 318(2) and 318(3) are:
- Non-cognizable;
- Bailable; and
- Triable by any Magistrate.
Q35. What is the classification of Section 318(4)?
Answer:
According to the supplied classification, an offence under Section 318(4) is:
- Cognizable;
- Non-bailable; and
- Triable by a Magistrate of the First Class.
This reflects the more serious nature of aggravated cheating involving delivery of property or valuable security.
Q36. What is the difference between cheating and breach of contract?
Answer:
This is one of the most important distinctions under Section 318.
A breach of contract occurs where a person genuinely intends to perform an agreement when it is made but later fails to perform it.
Cheating, however, requires dishonest or fraudulent intention at the relevant initial stage.
Example / Application
A receives advance payment from B after promising to supply goods.
Situation 1:
A never intended to supply the goods and made the promise solely to obtain B's money.
This may amount to cheating.
Situation 2:
A genuinely intended to supply the goods but later could not do so because of subsequent circumstances.
This may constitute breach of contract rather than cheating.
Q37. What did Hari Prasad Chamaria v. Bhisun Kumar Surekha establish?
Answer:
In Hari Prasad Chamaria v. Bhisun Kumar Surekha, AIR 1974 SC 301, the supplied comments emphasise that mere inability to fulfil a promise does not automatically amount to cheating.
Where the circumstances show only subsequent non-performance, the matter may give rise to civil liability rather than criminal liability for cheating.
The dishonest intention must exist at the relevant initial stage.
Q38. What did Nageshwar Prasad Singh v. Narayan Singh explain?
Answer:
In Nageshwar Prasad Singh v. Narayan Singh, AIR 1999 SC 1480, the supplied comments describe a contractual transaction where part of the consideration had already been paid.
A civil action relating to the contract was brought, along with criminal proceedings alleging cheating.
The Court considered the absence of dishonest intention from the beginning significant and treated the matter as a breach of contract rather than cheating.
The case illustrates that criminal proceedings should not automatically be used merely because a contractual obligation remains unfulfilled.
Q39. What did Samir Sahay v. State of Uttar Pradesh explain about civil disputes?
Answer:
In Samir Sahay v. State of Uttar Pradesh, AIR 2017 SC 5327, the supplied comments emphasise that the dishonest intention must exist at the beginning or early stage of the transaction.
At the time the victim parts with money, it must be shown that the accused:
- Knew the representation was false; and
- Made it with the intention of deceiving the victim.
If this cannot be established, the dispute may remain civil rather than amounting to criminal cheating.
Q40. What did Dr. Sharma's Nursing Home v. Delhi Administration explain?
Answer:
In Dr. Sharma's Nursing Home v. Delhi Administration, (1998) 8 SCC 745, the supplied comments describe a situation involving an assurance regarding an air-conditioned room.
Although the promised facility was not provided and charges were imposed, the supplied comments state that there was insufficient evidence to establish dishonest intention from the beginning.
The principle is that mere non-fulfilment of a promise does not amount to cheating unless the necessary dishonest intention existed when the promise was made.
Q41. What is the difference between cheating and criminal breach of trust?
Answer:
The supplied comments refer to Shankarlal Vishwakarma v. State of Madhya Pradesh, (1991) Cr LJ 2808 (MP) in explaining the distinction.
In criminal breach of trust, property is initially received through entrustment, and the dishonest misappropriation occurs in breach of that trust.
In cheating, the victim is deceived from the beginning and is thereby induced to deliver property.
The distinction can be remembered as:
Cheating → deception precedes delivery
Criminal breach of trust → entrustment precedes dishonest misappropriation
Q42. How is cheating different from criminal misappropriation?
Answer:
The supplied comments explain that the timing of dishonest intention is again important.
In cheating, the accused possesses dishonest intention from the beginning and uses deception to induce the victim to part with property.
In criminal misappropriation, possession of the property may initially arise without such deception, and the dishonest intention to misappropriate develops subsequently.
Thus:
Cheating → dishonest intention before or at obtaining property
Criminal misappropriation → dishonest intention may arise after possession is obtained
Q43. What happened in the case involving alleged divine powers?
Answer:
The supplied comments refer to Shri Bhagwan Samardha Sreepadha Vallabha Venkata Vishwanandha Maharaj v. State of Andhra Pradesh, AIR 1999 SC 2332.
The accused claimed to possess divine powers and represented that he could treat the dumbness of a girl child.
Through that representation, money was obtained from the victim.
The Court treated the false representation concerning divine powers, followed by inducement to pay money, as conduct capable of constituting cheating.
The case illustrates the basic sequence:
False representation → deception → inducement → payment of money
Q44. Can a false promise to marry amount to cheating?
Answer:
According to the supplied comments, a false promise to marry may amount to cheating where it is established that the promise was false from the very beginning and was made fraudulently to induce the victim to act in a way she otherwise would not have acted.
The crucial point is not merely that the marriage eventually did not occur.
It must be proved that:
- The accused never genuinely intended to marry when the promise was made;
- The promise was made fraudulently or dishonestly; and
- The victim was induced by that deception.
Q45. What principle was discussed in Ravichandran v. Mariyammal?
Answer:
In Ravichandran v. Mariyammal, (1992) Cr LJ 1675 (Mad), the supplied comments state that false representation concerning marriage used to deceive a woman and induce sexual intercourse was treated as capable of amounting to cheating.
The important principle for the present section is that the representation must have been false and deceptive from the beginning.
Q46. What principle was discussed in Mailsami v. State of Tamil Nadu?
Answer:
The supplied comments refer to Mailsami v. State of Tamil Nadu, (1994) Cr LJ 2238 (Mad), involving a promise to marry followed by sexual relations and pregnancy.
The comments emphasise that, for liability for cheating, it must be established that the promise used to induce the victim was false from the beginning and was made with fraudulent intention without an intention to honour it.
Therefore:
Subsequent failure to marry alone is not enough.
The initial fraudulent intention must be established.
Q47. What kind of damage or harm is contemplated by Section 318(1)?
Answer:
Where the cheating operates through intentionally inducing a person to do or omit something, the act or omission must cause or be likely to cause damage or harm to the victim in:
- Body;
- Mind;
- Reputation; or
- Property.
The provision is therefore wider than purely financial loss.
It recognises physical, mental, reputational and proprietary harm.
Q48. Must there be a connection between the inducement and the harm?
Answer:
Yes.
According to the supplied comments, the damage or harm must be sufficiently connected with the induced act or omission.
The relationship should be proximate rather than remote or vague.
In other words, the relevant harm must arise, or be likely to arise, as a consequence of what the victim was induced to do or omit because of the deception.
Q49. What principle was discussed in Ramkrishna Babura Maske v. Kisan Shivraj Shelke?
Answer:
In Ramkrishna Babura Maske v. Kisan Shivraj Shelke, (1975) Cr LJ 173 (Bom), the supplied comments describe allegations concerning concealment of pregnancy in connection with marriage.
The court considered whether the required wrongful loss or harm resulting from the alleged deception had been established.
The supplied comments state that although the concealed fact might have consequences in matrimonial law, the necessary elements for the offence of cheating were not established.
The case illustrates that deception alone is insufficient unless the other statutory requirements of cheating are also present.
Q50. Can cheating be committed without delivery of property?
Answer:
Yes.
This is an important feature of Section 318(1).
Cheating may occur through dishonest or fraudulent inducement involving property, but it may also occur where the accused intentionally induces the victim to:
- Do something; or
- Omit to do something
which the victim would not have done or omitted without the deception, and the resulting act or omission causes or is likely to cause the required harm.
Therefore, delivery of property is not necessary in every form of cheating.
Q51. What is the difference between the two main branches of cheating under Section 318(1)?
Answer:
The definition essentially contains two forms.
First Branch — Property-related cheating
The victim is fraudulently or dishonestly induced to:
- Deliver property; or
- Consent to another person retaining property.
Second Branch — Act or omission-related cheating
The victim is intentionally induced to:
- Do something; or
- Omit to do something
which he would not otherwise have done or omitted, and the consequence causes or is likely to cause damage or harm to body, mind, reputation or property.
This distinction helps explain why cheating is broader than simply obtaining money through fraud.
Q52. What is the most important test for distinguishing cheating from mere breach of promise?
Answer:
The most important question is:
What was the intention of the accused when the promise or representation was originally made?
If the accused genuinely intended to perform but subsequently failed, the matter may be civil.
If the accused never intended to perform and used the promise merely as a device to deceive and induce the victim, the conduct may amount to cheating.
The timing of the dishonest intention is therefore crucial.
Key Provisions (Study Notes)
Definition of Cheating
Section 318(1) requires:
1. Deception;
2. Inducement;
3. Dishonest, fraudulent or intentional conduct as required by the relevant branch;
4. Delivery/retention of property or an induced act/omission; and
5. Where applicable, damage or likely harm to:
o Body;
o Mind;
o Reputation; or
o Property.
Dishonest Concealment
Dishonest concealment of facts is expressly treated as deception.
Central Rule on Mens Rea
The dishonest or fraudulent intention must generally exist from the beginning of the transaction.
A later failure to fulfil a genuine promise does not automatically constitute cheating.
Cheating v. Breach of Contract
Cheating:
Dishonest intention exists from the beginning.
Breach of contract:
There was initially a genuine intention to perform, followed by subsequent failure.
Cheating v. Criminal Breach of Trust
Cheating: deception → delivery of property.
Criminal breach of trust: entrustment → subsequent dishonest misappropriation.
Cheating v. Criminal Misappropriation
Cheating: dishonest intention exists when property is obtained through deception.
Criminal misappropriation: dishonest intention to misappropriate may arise after possession has already been obtained.
Section 318(2) — General Cheating
Punishment:
- Imprisonment up to 3 years; or
- Fine; or
- Both.
Classification:
- Non-cognizable
- Bailable
- Triable by any Magistrate
IPC equivalent:
Section 417 IPC
Maximum imprisonment increased:
1 year → 3 years
Section 318(3) — Cheating Where Offender Was Bound to Protect Victim's Interest
Punishment:
- Imprisonment up to 5 years; or
- Fine; or
- Both.
Classification:
- Non-cognizable
- Bailable
- Triable by any Magistrate
IPC equivalent:
Section 418 IPC
Maximum imprisonment increased:
3 years → 5 years
Section 318(4) — Aggravated Cheating Involving Property or Valuable Security
Punishment:
- Imprisonment up to 7 years; and
- Fine.
Classification:
- Cognizable
- Non-bailable
- Triable by Magistrate of the First Class
IPC equivalent:
Section 420 IPC
Key Takeaway
Section 318 of the Bharatiya Nyaya Sanhita, 2023 deals comprehensively with cheating, the essence of which is deception followed by dishonest, fraudulent or intentional inducement. The victim may be induced to deliver or permit retention of property, or to perform or omit an act that causes or is likely to cause harm to body, mind, reputation or property. Dishonest concealment of facts may itself constitute deception.
The most important principle is the timing of the dishonest or fraudulent intention. Where a person makes a promise with a genuine intention to perform but subsequently fails, the dispute may amount merely to a civil breach of contract. Where the promise or representation was false from the beginning and was used to induce the victim, criminal cheating may arise. Section 318 also provides progressively serious punishment for general cheating, cheating by persons bound to protect another's interests, and aggravated cheating involving delivery of property or valuable security.
