Cheating is one of the most litigated offences under the Indian Penal Code (IPC). Section 415 IPC defines cheating, while Section 420 IPC prescribes punishment when cheating is accompanied by dishonestly inducing delivery of property. Under the Bharatiya Nyaya Sanhita, 2023 (BNS), the corresponding provision is Section 318, which substantially retains the definition and ingredients of cheating while harmonising language with the new code.
Over the years, courts have repeatedly stressed that not every false statement constitutes cheating—the misrepresentation must relate to a material fact and must induce the victim to act to their detriment. Recently, in Jupally Lakshmikantha Reddy v. State of Andhra Pradesh & Anr. (2025 INSC 1096), the Supreme Court reaffirmed this principle, quashing a criminal prosecution under Section 420 IPC where the alleged false representation had no causal link to the decision of the authority.
This article examines the statutory framework, essential ingredients, judicial interpretations, and the implications of the Court’s ruling. It contextualises the doctrine that false representation, to amount to cheating, must be both material and causative of harm or inducement.
Statutory Framework
Definition of Cheating: Section 415 IPC
Section 415 IPC defines cheating in two parts:
1. Deception by false representation which the maker knows to be false, and thereby
- fraudulently or dishonestly induces a person to deliver property, or
- to consent to retention of property; or
2. Intentional inducement to do or omit to do something which the victim would not otherwise do, resulting in harm to body, mind, reputation, or property.
Thus, deception alone is insufficient—it must be accompanied by fraudulent/dishonest inducement or intentional inducement leading to harm.
Punishment: Section 420 IPC
Section 420 IPC applies when cheating results in delivery of property or valuable security. Punishment extends to imprisonment up to seven years with fine.
Related Definitions
- Dishonestly (Section 24 IPC): Intention to cause wrongful gain or wrongful loss.
- Fraudulently (Section 25 IPC): Intention to defraud.
- Wrongful gain/loss (Section 23 IPC): Gain or loss of property by unlawful means.
These definitions emphasise mens rea (intention), making it clear that inadvertent falsehoods or immaterial misrepresentations do not constitute cheating.
The Supreme Court’s 2025 Ruling: Jupally Lakshmikantha Reddy Case
Background
The appellant’s society ran an educational institution in Andhra Pradesh. Allegations arose that it obtained recognition by submitting a forged fire safety “No Objection Certificate” (NOC). An FIR was registered under Sections 420, 465, 468, 471 IPC.
However, as per the National Building Code of India, 2016, institutions housed in buildings below 15 metres in height did not require a Fire NOC. The appellant’s building was 14.20 metres tall. Further, in writ proceedings, the High Court had directed that affiliation be renewed without insisting on such an NOC.
Despite this, a charge sheet was filed alleging cheating.
Findings of the Supreme Court
The Court analysed the offence of cheating under Section 420 IPC and held:
1) Essential Ingredient of Materiality:
The alleged false representation (submission of a fake NOC) was not material, since no NOC was required for buildings below 15 metres. Recognition or renewal of affiliation could not have been induced by this document.
2) Causal Link Missing:
A false statement must induce the victim to act in a way they would not otherwise do. Here, affiliation was granted independently of the NOC requirement.
3) Forgery Not Attracted:
No evidence showed that the appellant created the document. Even if the NOC was fabricated, the absence of mens rea and lack of material inducement meant no offence under Sections 465, 468, or 471 IPC was established.
Accordingly, proceedings were quashed, with the Court stressing that false representation must relate to a material fact inducing wrongful gain/loss.
Broader Judicial Principles on Cheating
1. False Representation Must Be Material
A representation is “material” if it affects the decision-making of the victim. If the misrepresentation relates to an irrelevant or unnecessary fact, the offence is not made out. The Court in Reddy reaffirmed that immaterial misrepresentation, even if false, does not amount to cheating.
2. Intention to Deceive
The intention must exist at the inception of the transaction. In Hridaya Ranjan Prasad Verma v. State of Bihar (2000) 4 SCC 168, the Supreme Court held that the mental element—fraudulent or dishonest intention—is the “gist of the offence.”
3. Inducement and Consequence
The deception must induce the victim:
- To deliver property; or
- To act/omit in a way causing harm.
In Dr. Sharma’s Nursing Home v. Delhi Administration (1998) 8 SCC 745, the Court clarified that mere deception without dishonest inducement does not amount to cheating.
Precedents Supporting the Principle
- Hridaya Ranjan Prasad Verma (2000): Held that the offence requires fraudulent/dishonest inducement; mere breach of contract does not constitute cheating unless the intention to deceive existed at inception.
- Dr. Sharma’s Nursing Home (1998): Held that deception alone is insufficient—there must be dishonest inducement causing wrongful gain/loss.
- Sheila Sebastian v. R. Jawaharaj (2018): Clarified forgery under Section 464 IPC requires proof that the accused made the false document.
Together with Reddy (2025), these rulings establish that false representation must materially impact the victim’s decision and cause harm.
Policy Rationale Behind the Principle
- Preventing Abuse of Criminal Law: Criminal process should not be weaponised for settling civil or administrative disputes.
- Preserving the Seriousness of Cheating Offence: If every falsehood were criminalised, the offence would lose its specific character and be misused.
- Protecting Liberty: Since cheating attracts imprisonment, courts emphasise strict scrutiny before allowing prosecution.
Conclusion
The doctrine that false representation must relate to a material fact inducing the victim to act to their detriment lies at the heart of the offence of cheating. The Supreme Court in Jupally Lakshmikantha Reddy v. State of Andhra Pradesh (2025) has once again emphasised this principle, protecting individuals from frivolous criminal prosecutions while preserving the integrity of criminal law.
Cheating, therefore, is not about every falsehood but about fraudulent deception that materially alters another’s decision, causing wrongful gain or loss. This distinction ensures that the law remains both fair and effective.
Important Link
Law Library: Notes and Study Material for LLB, LLM, Judiciary, and Entrance Exams