Maintenance of peace and order is
essential in any society for humans to live peacefully and without fear of
injury to their lives, limbs and property. The chief concern of a criminal law
is to protect and preserve certain fundamental social values and institutions,
and for this, it prescribes a set of norms of human behaviour and forbids
certain conducts; and prescribes punishments for the disregards of such norms
and conducts. The Cheating is one of the most general forms of human element
and behaviour.
The offence of cheating contemplated u/ss
415 and 420 of IPC, 1860, ordinarily involves fraudulent representation (which
includes concealment of material facts), followed by inducement to give away /
part with the property / money, on the basis of said representation. The word
property would include all things or any rights which can be measured in money
terms, including the money itself.
However, there may be an offence of
cheating even in the absence of parting with of any property / money, where one
is induced, to do or omit to do, something, which the said Person would not do,
or he would omit to do, if he were not so induced; and his said act or omission
has caused damage or harm in body, mind, reputation or property. [AIR 1970 SC
843; (2000) 4 SCC 168; AIR 1960 Bom 268; AIR 1934 Lah 833; AIR 1925 Cal 100;
AIR 1970 SC 843]
The offence of cheating per se is quite technical
in nature, for, one has to prove that the accused had no intention to
perform his promise when the representation was made; and to bring home the
guilt of the accused, among other things, the complainant has to show (a) such
conduct of the accused and (b) existence of such circumstances, which would expose
that the accused had no intention to perform his promise when the
representation was made.
However, there could be situations which
may justify the failure or non performance of promise made under the
representation, and for which no offence of cheating would lie. Such situations
may include (a) the emergence of such circumstances which were beyond the
contemplation and control of the accused, which had the inevitable result of
the failure of the performance of promise made by the accused; or (ii) the
emergence of such circumstances, which would show that the accused is legally
incapable of performing the promise; or (iii) such acts and omissions on the
part of the complainant himself for which the accused can rightfully claim
“withholding of performance” on his part; or (iv) the accused may plead that
the agreement is voidable at his option, or the Agreement is void for want of
free consent, coercion or undue influence, misrepresentation or mistake, or
fraud; or is void being it is against the public policy of India, or it is void
for being it sought to cause injury to property of another person.
What is important is to prove that, at
the time the inducement was offered or played, the accused ought to have known
that the representation he is making is false, and the representation was made
with the intention of deceiving the Person. [AIR 1974 SC 301; AIR 1957 SC 857;
AIR 1954 SC 724]
The intention is a state of mind and
there may not be any direct evidence to prove intention. The conduct of a
person best indicates his intentions. The overt acts and omissions of said
person, prior and subsequent to (mis)representation would determine his
intention.
Therefore, all the relevant overt acts
and omissions of the accused must be clearly and legibly set out, right from
the date of making of false representation, till the filing of the complaint.
It must be averred that there was a representation; and on the faith of said
representation, the Complainant has parted with the property / money, and has
duly performed his promise; and there is a failure of performance of promise on
the part of accused, without lawful justification.
What is required to be led in evidence
is, the overt acts and omissions which will go to show that the concerned
person acted honestly, dishonestly, or with ill-will, in the surrounding
circumstances of the case.
The existence of intention of
dishonesty, fraudulently; negligence; ill will etc. or good faith etc. are
matters of “appreciation of evidence”, which are established, by way of
“arguments”, at the conclusions of evidences, thereby drawing natural and
logical inferences, from the proved acts and omissions, in the backdrop of
surrounding circumstances. (Ss.8 & 14 of Evidence Act).
In cases where the Complainant satisfies
the trial Court that he had acted based on the representation of the accused,
parted with the property / money, and performed his promise; and the accused is
failing in his performance; and the accused is maintaining silence or the
accused does not furnishes any legitimate or reasonable explanation for his
failure, the Courts would be entitled to draw adverse inference against the
Accused that at the time of making promise / representation, he had no
intention to fulfill the promise.
The
mandate of Section 106 of Evidence Act, 1872: And the accused
must lead evidence to show the change of circumstances for his failure to
perform his promise, or any other evidence / defense available to him under the
law, which lawfully relieves him from performing his promise so made.
Whereas it may be argued that Accused
has a right to remain silent and he cannot be compelled to lead evidence, the
mandate of section 106 of Evidence Act, 1872, is significant.
The submission is – any representation
entails a situation where parties, having know of their prevailing
circumstances, voluntarily enter into contract and make promises for the
performance of their part, based on the agreed terms of the contract. And where
one of the parties to the contract, act contrary to, or fails in the
performance of his promise, the said party could only throw light as why it is
acting contrary to or not performing his promise. The said facts are within
that party’s exclusive personal knowledge and this burden can only be
discharged by him, by leading evidence to that effect.
And, therefore it is the accused who has
to lead evidence to the effect which furnishes explanation for the failure of
performance of his promise made during representation. The “factum” of
explanation must be such which was beyond the contemplation / control of the
accused; or has to lead evidence or cull out from cross of the complainant, to
show such acts and omissions on the part of the complainant for which the
accused can rightfully claim “withholding of performance” on his part. [1989
CrLJ 443 MP HC; 2014 (1) BCR(Cri) 192
In this backdrop, it is essential to set
out instructive observations of Apex Court in the case of Rajkumar Versus State
Of Madhya Pradesh [AIR 2014 SC (Supp) 1109]
Para 14: In Prithipal Singh & Ors. V/s. State of Punjab &
Anr., (2012) 1 SCC 10, this Court relying on its earlier judgment in State of W.B.
V/s. Mir Mohammad Omar, AIR 2000 SC 2988, held as under:
"..... if fact is especially in the knowledge of any
person, then burden of proving that fact is upon him. It is impossible for the
prosecution to prove certain facts particularly within the knowledge of the
accused. Section 106 is not intended to relieve the prosecution of its burden
to prove the guilt of the accused beyond reasonable doubt. But the section
would apply to cases where the prosecution has succeeded in proving facts from
which a reasonable inference can be drawn regarding the existence of certain
other facts, unless the accused by virtue of his special knowledge regarding
such facts, failed to offer any explanation which might drive the court to draw
a different inference. Section 106 of the Evidence Act is designed to meet
certain exceptional cases, in which, it would be impossible for the prosecution
to establish certain facts which are particularly within the knowledge of the
accused. (See also: Neel Kumar alias Anil Kumar V/s. State of Haryana, (2012) 5
SCC 766; and Gian Chand & Ors. V/s. State of Haryana, AIR 2013 SC 3395).
Complaint
for cheating maintainable in commercial transactions: The Apex Court
in a case before it have observed to say that simply because of the fact that there
is a remedy provided for breach of contract, that does not by itself clothe the
Court to come to a conclusion that civil remedy is the only remedy available to
the appellant herein. Both criminal law and civil law remedy can be pursued in
diverse situations. [AIR 2000 SC 1869]
The offence of cheating also includes,
Dishonest or fraudulent removal or concealment of property to prevent
distribution among creditors (S.421 of IPC); Dishonestly or fraudulently
preventing debt being available for creditors (S.422 of IPC); Dishonest or
fraudulent execution of deed of transfer containing false statement of
consideration (S.423 of IPC); Dishonest or fraudulent removal or concealment of
property (S.424 of IPC).
Sandeep Jalan
Advocate
Mumbai
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