Cheating in the IPC - Interesting Overlaps

Section 420 of the Indian Penal Code, 1860 [IPC] is perhaps one of the most famous provisions in the Code, right up there with Section 302 IPC. In this short post, I discuss an interesting point of overlap between Sections 415 IPC and 417 IPC, and their more famous cousin Section 420 IPC. 

Reading the Text 

Section 415 IPC defines cheating and deals with a variety of acts and omissions, which should be clear below:

A. Whoever, by deceiving any person, 

A.1 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

A.2 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

A.2.1 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

The fulcrum is deception - everything else flows from that. Deceiving is the conduct required of the Accused. This conduct must result in either of the two sets of consequences in A.1 and A.2. A.1: an unlawful transfer/retention of property caused through deception. A.2: doing/not doing a thing which is done because of the deception and causes/is likely to cause harm or damage. These consequences have different mens rea terms associated with them. The Accused must fraudulently or dishonestly induce the transfer of property [Fraudulently is defined in Section 25 IPC and Dishonestly is defined in Section 24 IPC]. Or, the Accused must intentionally induce the doing/not doing of a thing. If the conduct and consequences are brought about with the required mental element, a person is said to cheat.

Cheating is punished in Section 417 IPC, which simply states "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". A slightly different form of cheating is punished by Section 420 IPC, which states:

Whoever cheats and thereby dishonestly induces 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. 

Whoever cheats invokes the definition under Section 415 IPC. The provision then requires the person cheating (X) to dishonestly induce the person deceived to delivery any property to any person. The difficulty should be apparent here. The first part of the definition in Section 415 IPC itself provided that cheating can occur in situations where X deceives Y and dishonestly induces Y to deliver any property to any person. Effectively, then, the first part of Section 420 IPC reads Whoever cheats, and thereby cheats, before moving to the bit about making, destroying or altering valuable securities. This oddity remains merely an interesting drafting problem when viewed independently. But recall that Section 417 IPC punished cheating in all its hues, and looks more benign when compared with Section 420 IPC. 417 is non-cognizable (no arrest without warrant), bailable (bail as a matter of right), and inflicts imprisonment up to one year. Section 420 IPC is cognizable (arrest without warrant), non-bailable (no right to bail), and allows for imprisonment up to seven years. 

Cheating through History

So how do we resolve this? One step would be to see if this was discussed by the drafters of the Code. Looking at Lord Macaulay's 1838 Bill we find cheating offences were present very differently. Section 394 of the Bill punished 'cheating', Section 392 defined cheating as follows:

Whoever, by intentionally deceiving any person, fraudulently induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or to affix a seal to any substance, or to make, alter, destroy the whole or any part of a document which is, or purports to be, a valuable security, is said to "cheat" 

There was no Section 420 IPC equivalent. In fact, the comments contain an interesting discussion on how the framers actively decided not to render all kinds of deceptions criminal for that would that defeat the rule of criminal law being the last resort and make the penal code a law to enforce morals. This attitude changed in 1860 as can be seen with the addition of the second kind of consequences (described as A.2 in the discussion above). Section 420 IPC was also added to the mix, and a nearly contemporaneous commentary to the promulgation of the Code states that "increased punishment may be awarded where the cheating causes any property to be delivered 'dishonestly', that is where the it is of the kind which the first clause of the definition in Section 415 describes ..."  [Morgan & Macpherson, The Indian Penal Code 1860, p. 378 (1863)]. 

So, the scheme possibly intended was to demarcate the two sets of consequences into two punishing provisions. Assuming this is the case, then I argue the drafting of Section 420 IPC leaves one wanting for clarity. The provision confuses in trying to club the consequences of delivering property, and making, altering or destroying valuable securities.   

Conclusion

Since the IPC came in 1860, there have been a few decisions by High Courts considering the issue that is the subject of this post. Most of them concur with what appears to have been the legislative intent - Section 420 IPC punishes cases where deception results in the dishonestly inducing a person to deliver property, while Section 417 IPC punishes other forms of cheating not accompanied by delivery of property [See e.g. Supdt & Legal Remembrancer v. Manmatha Bhushan Chatterjee, AIR 1924 Cal 495; Shree Krishna Polyster v. State (GNCT of Delhi), Crl. M.C. 779/2005 decided on 23.10.2007]. It would have been a more elegant solution for the Code to include the consequence pertaining to valuable securities in the definition in Section 415 IPC itself, and then have the different punishment clauses. An amendment to that effect would help rid the confusion existing to this day.

Snippet - Unintended amendments to the Crime of Forgery?

My attention was drawn to a rather startling fact recently [see here for the one piece I found discussing this online]. The definition of forgery under Section 464 of  the Indian Penal Code 1860 [IPC] today is not what it used to be - and is commonly still assumed to be by many laypersons and lawyers alike. The cause of this is the series of amendments made to the IPC by the First Schedule to the Information Technology Act 2000 [the link leads to all statutes passed in 2000, scroll around to find the this particular one].

Section 464 before the amendment read as follows:

First - Who dishonestly or fraudulently makes, signs, seals or executes a document or part of a document, or makes any mark denoting the execution of a document, with the intention of causing it to be believed that such document or part of a document was made, signed, sealed or executed by or by the authority of a person by whom or by whose authority he knows that it was not made, signed sealed or executed, or at a time at which he knows that it was not made, signed, sealed or executed ... [emphasis supplied]

The provision after the amendment reads as follows:

A person is said to make a false document or false electronic document or false electronic record - 

First - who dishonestly or fraudulently - 

(a) makes, signs, seals or executes a document or part of a document;

(b) makes or transmits any electronic record or part of any electronic record;

(c) affixes any electronic signature on any electronic record;

(d) makes any mark denoting the execution of a document or the authenticity of the electronic signature

with the intention of causing it to be believed that such document or part of document, electronic record or electronic signature was made, signed, sealed executed, transmitted or eaffxed by or by the authority of a person by whom or by whose authority he knows that it was not made, signed, sealed, executed or affixed ...    

The last bit in bold has curiously disappeared with the amendment. This has important ramifications for it means that antedating documents no longer constitutes forgery. Mr. Mahesh Jethmalani argues that it is possible to rebut this conclusion by arguing that this consequence is the result of an inadvertent legislative oversight, rather than the product of explicit legislative design. This invokes the doctrine of casus omissus, which has been invoked by courts to remedy patent legislative defects [the Madras High Court in 2007 discussed the concept at length in Sundaram Brake Linings Ltd. v. Kotak Mahindra Bank Ltd.], albeit rarely. The argument certainly has merit in this case. The purpose of the amendments made by the Information Technology Act to the IPC was to broaden the scope of the offences by including the electronic medium within them. And no discussion in parliament on the Information Technology Bill mentioned anything about removing a substantial portion of the forgery offence.

It has been nearly sixteen years since the amendments were passed and this issue has not received any judicial attention to my knowledge. From the latest I've heard though, a petition is currently pending in the Supreme Court where this issue has been flagged for consideration. It will be interesting to see which way the decision goes, whenever it does come.