MAHADEO PRASAD v.

STATE OF WEST BENGAL : A CRITICAL

ANALYSIS

Subject: Criminal Law 2.1

Submitted to: Mr. Mukul Raizada

Submitted by: Vaibhav Tiwari

Roll No.: 78LLB10

1st year, 2nd semester, 2010

National Law University, Delhi

i
 TABLE OF CONTENTS

Table of Contents .......................................................................................................................ii

Table Of Abbreviations............................................................ Error! Bookmark not defined.

Table of Cases .......................................................................... Error! Bookmark not defined.

Bibliography ............................................................................................................................. vi

Chapter i ..................................................................................................................................... 1

Introduction ................................................................................................................................ 1

1.1) Basic Overview............................................................................................................... 1

1.2) Research Question and Hypothesis ................................................................................ 1

1.3) Research Methodology ................................................................................................... 2

1.4) Chapterisation ................................................................................................................. 2

Chapter-ii ................................................................................................................................... 3

Conceptual analysis of section 420 ............................................................................................ 3

2.1) Cheating .......................................................................................................................... 4

2.2) Dishonest inducement..................................................................................................... 5

2.3) Mens rea ......................................................................................................................... 6

Chapter iii................................................................................................................................... 8

Mahadeo prasad v. State of West Bengal: Case analysis........................................................... 8

3.1) Material Facts ................................................................................................................. 8

3.2) Issue under consideration ............................................................................................... 9

3.3) Arguments advanced ...................................................................................................... 9

3.4) Judgement ..................................................................................................................... 10

3.5) Critical Analysis ........................................................................................................... 10

Chapter iv ................................................................................................................................. 13

Cases in which principle followed ........................................................................................... 13

4.1) Gurcharan Singh Arora v. State. ................................................................................... 13

ii
 4.2) Inder Mohan Goswami v. State of Uttaranchal ............................................................ 13

4.3) B Suresh Yadav v. Sharifa Bee ................................................................................... 14

Chapter v .................................................................................................................................. 15

Section 415 and Section 420 .................................................................................................... 15

Chapter vi ................................................................................................................................ 17

Conclusion ............................................................................................................................... 17

iii
 TABLE OF ABBREVIATIONS

AIR All India Reporter

Cr LJ Criminal Law Journal

Ed. Edition

Ibid Ibidem

IPC Indian Penal Code

Mad Madras

MLJ Madras Law Journal

P Page

PC Privy Council

Raj Cr Cas Rajasthan Criminal Cases

Sec Section

S. Section

SC Supreme Court

SCC Supreme Court Cases

Supra Above

v. Versus

Vol. volume

iv
 TABLE OF CASES

B Suresh Yadav v. Sharifa Bee………………………………………………………………14

Bashirbhai Mohamedbhai v. State of Bombay………………………………………………..3

Devendra Kumar Singla v. Baldev Krishna Singla……………………………………………3

Gobinda Biswas v. State……………………………………………………………………..15

Gurcharan Singh Arora v. State……………………………………………………………...13

Hira Lal Hari Lal Bhagwati v. CBI………………………………………………………...6,11

Inder Mohan Goswami v. State of Uttaranchal………………………………………………13

Indian Oil Corporation v. NEPC Ltd. &Ors…………………………………………………..4

Mankori v. State of Rajasthan…………………………………………………………………6

R S Nayak v. A R Antulay…………………………………………………………………..4,6

Rangayya v. Somappa………………………………………………………………………..15

Shivnarayan Kabra v. State of Madras………………………………………………………6,7

State of Bihar v. Kailash Prasad Sinha………………………………………………………...3

State of Maharashtra v. Mayor Hans George………………………………………………...11

Suram Kiran Kumar Reddy And Ors. vs State Of A.P. And Anr…………………………..15

Veer Prakash Sharma vs Anil Kumar Agarwal & Anr………………………………………11

Emperor v. Khwaja Nazir Ahmed…………………………………………………………...16

v
 BIBLIOGRAPHY
Books:

RA Nelson, INDIAN PENAL CODE, 9th ed., Vol 4, Butterworth Lexis Nexis.

Dr Hari Singh Gour’s , PENAL LAW OF INDIA , 11th ed. ,Vol 4 , Law publishers India Pvt
Ltd.

KD Gaur, THE TEXT BOOK ON INDIAN PENAL CODE, 4th ed., Universal Law
Publication House.

KD Gaur, CRIMINAL LAW: CASES AND MATERIALS, 5th ed. , Lexis Nexis Butterworth.

KI Vibhute, PSA PILLAI’S CRIMINAL LAW , 10th edn. Lexis nexis Butterworths..

J S Sarkar , INDIAN PENAL CODE , Vol 2 , Kamal Law House Calcutta.

Editor VR Manohar, RATANLAL AND DHIRAJLAL THE INDIAN PENAL CODE, 32 nd

ed. 2010 , Lexis nexis Butterworths.

Surendra Malik and Sumeet Malik, Supreme Court Criminal Digest 2008, Eastern Book
Company.

Surendra Malik and Sumeet Malik, Supreme Court Criminal Digest 2005, Eastern Book
Company.

V.R. Manohar (ed.), Criminal Law journal, Vol. 117, March 2011

Online sources :

1) www.manupatra.com

2) www.mljlibrary.com

3) www.scconline.com

4) www.indiankanoon.com

vi
 CHAPTER I

INTRODUCTION

1.1) Basic Overview

The research project deals with the case of Mahadeo Prasad v. State of West Bengal 1. This
case deals with cheating. In this case the accused who promised to pay cash on delivery took
the delivery and did not pay the cash on delivery and instead vanished. The court looked on
the basic issue of presence of intention and whether intention was there at the time the
inducement was made. The court gave the judgement based on the evidence. The basic ratio
of the case was that the intention to cheat which is an essential ingredient under the offence
of cheating under section 420 of the Indian Penal Code should be present at the time the
inducement was made.

The project also deals with conceptual analysis of section 420 of the IPC and in this regard
various ingredients of the offence are traced in the present case.

The research project also analyses the case and the judgement based on the evidence and the
arguments advanced. The case analysis also involves critical analysis in which the ratio of the
case is analysed and its various shortcomings as well as the good aspects are discussed. Also,
recent case laws following the same principle as has been held by the court in this case have
been discussed.

Finally the research project also deals with the issue of the need of a separate section 420 in
light of one section of 415 dealing with cheating generally, In this regard the difference
between the two sections is discussed which is apparently that the offence under section 420
is a nore graver offence than the offence under section 415 and section 417.

1.2) Research Question and Hypothesis

There are two basic research questions discussed by the researcher. These are :-

1) Whether an intention to cheat developed after the agreement has been made, can be
considered as forming ‘mens rea’ under section 420?

Hypothesis:- No

1
AIR 1954 SC 724.

1
2) Whether there is a need for a separate section 420 when section 415 seals with cheating
generally?

Hypothesis:; Yes

1.3) Research Methodology

The research methodology adopted for this topic is doctrinal in nature. As this project
requires a case analysis, various methods have been made to analyse it and have been done
through the use of cases and textbooks made available through the NLUD library. Research
for this project has been conducted mainly by utilizing books- primary and secondary sources
available in the NLU Delhi Law library. Also many articles from the internet and legal
databases like Manupatra, Heinonline, Jstor etc.

1.4) Chapterisation
In the first chapter the researcher would give a brief overview of the project. In the second
chapter the researcher analyses the given case conceptually and deals with the ingredients of
the offence. In the third chapter the case is analysed firstly in the way the Supreme Court
gave the judgement and secondly the critical analysis. In the fourth chapter various cases on
which the principle of this case is based have been dealt with. In the fifth chapter the
difference between the sections 415, 417 and 420 is dealt with. The sixth chapter finally
concludes the project.

2
 CHAPTER-II

CONCEPTUAL ANALYSIS OF SECTION 420

The instant case comes under Section 420 of the Indian Contract Act, 1860. Under this
chapter, conceptual analysis of the section will be covered. By, conceptual analysis it is
meant that various essential ingredients of the offence of cheating will be discussed and it
will be checked whether all these essentials are present in the instant case. Now, section 420
of the Indian Penal Code says that :-

"Whoever cheats and thereby induces the person deceived to deliver any property to any
person or to dishonestly 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.”

The essential ingredients of this offence thus are2:-

1) There must be deception (as contemplated by Section 415 of the Indian penal Code) by the
accused; and,

2) by the said deception the accused must dishonestly induce the complainant –

(i) to deliver any property to any person.

(ii) to, make, alter or destroy the whole, or any part, of the valuable security or anything
which is signed or sealed and which is capable of being converted into any valuable security.

3 4
In another leading case of Devendra Kumar Singla v. Baldev Krishna Singla , the court
discussed the essential ingredients to attract Section 420 of the IPC. Ccording to the Supreme
Court, the essential ingredients to attract this section are:-

1) Cheating,

2
State of Bihar v. Kailash Prasad Sinha, (1962) 2 Cr LJ 677.
3
Also the case of Bashirbhai Mohamedbhai v. State of Bombay, AIR 1960 SC 979.
4
AIR 2004 SC 3084.

3
2) dishonest inducement to deliver property or to, make, alter or destroy the whole, or any
part, of the valuable security or anything which is signed or sealed and which is capable of
being converted into any valuable security.

3) mens rea of the accused at the time of making the inducement.

From the two different sets of ingredients, we can safely conclude that the courts have related
the two concepts of deception and cheating which can be considered as an essential
ingredient. The ingredient of dishonest inducement is there in both the offence. The
ingredient of mens rea is additional in the second case and is a necessary question to be
answered. Thus, effectively there are three ingredients.

Each of these ingredients is discussed in the following sections.

2.1) Cheating

Cheating here refers to the first part of offence where the term ‘whoever cheats’ is used. As
already mentioned cheating and deception are used in the same sense. The use of word
cheating here is same as contemplated in the offence of cheating under section 415 of the
IPC. Now, the essential ingredients of the offence of 'cheating' are5 :

(i) deception of a person either by making a false or misleading representation or by other

action or omission

(ii) fraudulent or dishonest inducement of that person to either deliver any property or to
consent to the retention thereof by any person or to intentionally induce that person 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 in body, mind,
reputation or property.

In this case of Mahadeo Prasad v. State of West Bengal 6, looking at first element of cheating,
i.e. deception there is clear cut evidence that the first element of deception is present and this
deception in this case is through the act of the defendant. The facts which justify this are that

5
Indian Oil Corporation v. NEPC Ltd. & Ors, AIR 2006 SC 2780;R S Nayak v. A R Antulay AIR 1986 SC 2045.
6
AIR 1954 SC 724.

4
when the Jamadar of the complainant went to the Guddi of the Appellant. The Appellant took
delivery of the ingots but kept the Jamadar awaiting and did not pay the price to him. The
Jamadar waited for a long time. The Appellant went out and did not return to the Guddi and
the Jamadar ultimately returned to the complainant and reported that no payment was made
though the ingots were taken delivery of by the Appellant. Thus there was a definite act of
leaving his guddi which can also be seen as an omission to pay despite taking the delivery
which resulted in the ultimate leaving of the jamadar. Thus, in any case the first ingredient is
satisfied.

Now, coming to the second ingredient which is of dishonest or fraudulent inducement or

intentionally inducing the other person to do or omit to do an act.. According to the
researcher this case falls out under both the above heads. The first heads uses the term
dishonest inducement. Now, ‘dishonestly’ has been defined under the Indian Penal Code.
‘Dishonestly’ is defined as:-

“Whoever does anything with the intention of causing wrongful gain to one person or
wrongful loss to another person is said to do that thing "dishonestly".7

In this case there is wrongful loss to the defendant. Further, there was intention to cause
wrongful gain to him which will be shown in the third ingredient of the offence of cheating
under section 420 of the IPC which will be discussed in the subsequent sections. Thus there
was dishonest inducement which resulted in the act of delivering of goods. With the presence
of intention this can also be seen as intentionally deceiving the jamadar of the complainant to
deliver any property which he would not have delivered had he known that the defendant

Thus the ingredient of cheating was present in the instant case.

2.2) Dishonest inducement

Before checking for the presence of this ingredient, it is pertinent to understand what it talks
about. This ingredient talks about dishonest inducement which results in delivery of property.
This can be understood as the person deceived delivers to someone a valuable property , that
the person deceived was induced to do so, that person acted on the inducement in

7
Section 24, Indian Penal Code.

5
consequence of him having been deceived by the accused and that the accused acted
dishonestly or fraudulently when so inducing the person.8

Dishonest, as has been discussed earlier is defined in the Indian Penal Code, 1860.9 Its
definition has been mentioned above. The evidence clearly shows that there was wrongful
gain to the accused. The intention for the wrongful gain will be proved while dealing with the
next ingredient of intention. Further the jamadar of the complainant when delivering the
goods was induced to give the goods for the payment which was never given. Thus there was
an dishonest inducement. The conduct of the accused by vanishing after taking delivery
explains that. In this scenario there was no specific act done by the accused to induce the
plaintiff. The judgement by the Supreme Court in the case of Shivnarayan Kabra v. State of
Madras10 is very relevant here. In this case the court said in relation to dishonest inducement
that - “It is not necessary that a false pretence should be made in express words by the
accused. It may be inferred from all the circumstances including the conduct of the accused in
obtaining the property. In the true nature of things it is not always possible to prove dishonest
intension by any direct evidence. It can be proved by number of circumstances from which a
reasonable inference can be drawn.” In this case a reasonable inference can be drawn from
the conduct of accused who vanished after taking delivery. Thus there is dishonest
inducement on the part of the accused.

2.3) Mens rea

Mens rea as an ingredient itself has two components to fulfil the offence of cheating. These
are :- (i) presence of mens rea and (ii) presence of mens rea at the time of the inducement.
Thus the presence of mens rea at the time of inducement is an ingredient i.e. it should be
present ab initio. A subsequent failure to keep promise does not imply a presumption that
culpable intention was present right at the beginning.11

The question now arises as to how we determine guilty intention in these cases where there is
no fulfilment of promise. In these cases, the intention has to be proven by not only the oral
evidence of the witnesses but also by the surrounding circumstances including those which

8
Ratanlal and Dhirajlal’s, LAW OF CRIMES, 26TH ed., vol. 2, pg. 2431.
9
Supra No. 6..
10
AIR 1986 SC 986.
11
Hira Lal Hari Lal Bhagwati v. CBI, AIR 2003 SC 2545; Mankori v. State of Rajasthan 1977 Raj Cr Cas 54.

6
precede and follow the circumstances and the conduct of the accused in these circumstances,
whereby the complainant has been made to part with money .12

Now, looking at the facts of this case and applying the proposition of law above mentioned.
In this case it transpired in the evidence that the accused on the day before the delivery of the
ingots had a credit of around 3300 rupees and he was not going to receive any further
payments on the next day and additionally these would not go any long way in payment of 25
ingots of tin that he took delivery of.13 Therefore from the circumstances which precede and
follow the delivery of property it is clear that there was a guilty intention of the accused at the
time inducement was given.

Therefore after conceptually analysing all the three ingredients of cheating under section 420,
we can conclude that all the ingredients under section 420 of the Indian Penal Code are met
in this case of Mahadeo Prasad v. State of West Bengal.

12
Shivanarayan Kabra v. State of Madras : AIR 1967 SC 986.
13
Supra. 5.

7
 CHAPTER III

Mahadeo prasad v. State of West Bengal: Case analysis

Mahadeo Prasad v. State of West Bengal14 is a case dealing with Sec. 420 of the Indian Penal
Code. This case was initially filed at the court of Additional Presidency Magistrate of
Calcutta. An appeal was then filed in the High Court of Judicature at Calcutta and finally an
appeal by special leave against the decision of the High Court was filed at the Supreme Court
of India. The basic facts of this case were as follows.

3.1) Material Facts

The Appellant agreed to purchase from the complainant Dulichand Kheria 25 ingots of tin on
5th May 1951. These 25 ingots were to be delivered by the complainant at the seat of the
Appellant and it was agreed that the price which was fixed at the rate of Rs. 778 per cwt. and
amounted to Rs. 17,324 was to be paid by the Appellant as cash against delivery. The
Jamadar of the complainant went to the seat of the Appellant. The Appellant took delivery of
the ingots but kept the Jamadar awaiting and did not pay the price to him. The Jamadar
waited for a long time. The Appellant went out and did not return to the seat and the Jamadar
ultimately returned to the complainant and reported that no payment was made though the
ingots were taken delivery of by the Appellant.

The complainant who was induced to part with these 25 ingots of tin by the Appellant's
promise to pay cash against delivery realised that he was cheated. He therefore filed on the
11th May 1951 his complaint in the Court of the Additional Chief Presidency Magistrate,
Calcutta charging the Appellant with having committed an offence under Section 420 of the
Indian Penal Code. The Additional Presidency Magistrate, Calcutta held that the charge
against the Appellant was proved and convicted him and sentenced him as above. The
Appellant took an appeal to the High Court against this conviction and sentence passed upon
him. The High Court dismissed the appeal and confirmed the conviction and sentence passed
upon the Appellant by the Additional Presidency Magistrate, Calcutta. The accused then
appealed in the Supreme Court.

14
AIR 1954 SC 724.

8
3.2) Issue under consideration
The relevant section applied in this case is section 420 of the IPC. As has already been
mentioned, intention is an essential ingredient of the offence. In the instant case the only
ingredient of the section which came before the court or rather which the court addressed is
that of intention. The basic issue on which the court had to decide in this case was whether
having regard to the surrounding circumstances it could safely come to the conclusion that
the Appellant had no intention whatsoever to pay but merely promised to pay cash against
delivery in order to induce the complainant to part with the goods which otherwise he would
not have done.

3.3) Arguments advanced

The basic issue advanced by the prosecution was that in this case there was no intention on
the part of the accused to pay cash against delivery. This argument was supported by the fact
that there was sufficient evidence on the record to show that on the 5th May 1951 when such
delivery was taken by the Appellant, he had not with him any assets beyond the margin of Rs.
3,303 which certainly would not go a long way towards the payment of the price of the 25
ingots of which he took delivery amounting to nearly Rs. 17500.

The appellants however tried to prove that there was intention on their part. They tried to
defend this on four points which are :-

(i) The complainant would be anxious to sell the goods to the appellant because of falling
prices of tin and there would be no occasion for the Appellant to induce the
complainant to part with the goods on a false promise to pay cash against delivery.

(ii) The appellant had miscalculated his capacity to pay .

(iii) The bill that was given by the appellant to the complainant stipulated an interest of 12%
on the price of those goods which were not paid as cash in delivery and thus this is a
case of civil liability and not criminal liability.

(iv) The appellant was anxious to arrive at a settlement with the complainant and actually
went to his shop and was arrested there while negotiating a settlement and this
showed that he had harboured no fraudulent intentions against the complainant when
he had taken delivery of the ingots.

9
3.4) Judgement
The court before delivering the final judgement discussed all the four contentions by the
appellant. These are addressed respectively in the order in which they are mentioned above :-

(i) The court said that the appellant was total stranger to the complainant and Whatever be the
anxiety of the complainant to dispose of his goods he would not trust the Appellant who was
an utter stranger to him and give him delivery of the goods except on terms that the Appellant
paid the price of the ingots delivered to him in cash and that position would not be affected
by the fact that the market was rapidly declining. Thus this contention was not allowed.

(ii) The court said that there was no question related to miscalculation because the appellant
fully knew his commitments and what he would receive.as payment and nothing on record
suggested that he could have paid the amount on delivery.

(iii) The court agreed that payment of interest would import a civil liability on part of the
purchaser. However it would not eschew the criminal liability of the purchaser if the
circumstances at the time of purchasing show that there is criminal liability.

(iv) With regard to anxiety to arrive at a settlement the court said that the anxiety to arrive at
a settlement could easily be explained by the fact that the Appellant knew that he had taken
delivery of the ingots without payment of cash against delivery and the only way in which he
would get away from the criminal liability was to arrive at a settlement with the complainant.

The court thus showed that all the contentions raised by the appellant were of no avail. The
final judgement of the court was that at the time when the appellant took delivery of the 25
ingots of tin, he had no intention whatsoever to pay but merely promised to pay cash against
delivery in order to induce the complainant to part with the goods and thus he was rightfully
convicted under section 420 of the Indian Penal Code.

3.5) Critical Analysis

This case of Mahadeo Prasad v. State of West Bengal dealt with the issue of presence of
intention at the time when inducement was made and the court said that it is necessary to
prove that there was a dishonest or fraudulent intention at the time when inducement was
made to prove an offence. This was the ratio of the case. Now looking at the ratio it appears

10
to be a very justified ratio and it also has been followed in a number of subsequent cases.
There are both positive and negative points related to the ratio.

The positive point of this ratio is that it is in consonance of doctrine of mens rea. Mens rea is
a term which generally implies some blameworthy mental condition and according to this
doctrine absence of mens rea negatives the condition of crime.15 It has been held to be a
necessary ingredient of crime in a number of cases including State of Maharashtra v. Mayor
Hans George16. Now according to the judgement of this case of Mahadeo Prasad17 there
should be intention at the time of inducement. If the intention is not there then it is not a
criminal act and thus the presence of intention is an essential condition for this crime and thus
this ratio is in accordance with the doctrine of mens rea.

Now coming to the negative points or the criticisms of the judgement, there are majorly two
negative points. The first is regarding the intention and the second is regarding the time when
the intention is present.

The first point of criticism is proving the presence of intention. The basic problem behind
proving the intention is that it is very subjective. In the instant case there is clear cut evidence
to show that the accused was not in a position to pay and thus there was intention on his part.
However there are a lot of cases involving breach of contract in daily life and various courts
in various judgements have said that the distinction between a case of mere breach of contract
and one of cheating depends upon the intention of the accused at the time of the alleged
inducement.18 Further the conduct has to be determined by the surrounding circumstances
including those which precede and follow the circumstances and the conduct of the accused
in these circumstances, whereby the complainant has been made to part with money.19
Therefore intention which becomes very important in these large numbers of cases and its
becoming subjective affects a large number of these cases and raises a need for an objective
test.

The second issue is of the time at which inducement was offered. In this case and various
other cases it has been held that the intention should be there when the inducement was
offered and in cases where the intention develops later it is not covered under cheating.

15
K I Vibhute, PSA PILLAI’S CRIMINAL LAW, 10 th ed. 2008, pg. 53.
16
AIR 1965 SC 732.
17
Supra. 13.
18
Veer Prakash Sharma vs Anil Kumar Agarwal & Anr, (2007) 7 SCC 373.
19
Supra 11.

11
Therefore in all those cases where the intention develops subsequently.it is not a case of
cheating. A hypothetical fact situation will further illustrate this. The hypothetical fact
situation is :- The complainant owed money to the accused on three bonds and he had given
the money to the accused in full satisfaction of those bonds but the accused returned two
bonds and he decided that he would not return the third bond , thus there was intention to
cheat which was not present at the time promise was made and hence he would not be liable
for cheating. But in this case he should be held liable for there was intention to not pay. The
complainant might face difficulty because of this.

In another fact situation a person has ordered a person to manufacture and deliver some
goods for exporting. However the export price falls down and he refuses to take delivery. In
the instant case there has been effort and price put in by the complainant. However there was
intention on the part of the person before not paying. In such a fact situation criminal liability
cannot be negated absolutely. Thus subsequent intention is not covered under this section but
it should be covered.

Thus the judgement raises both positive and negative points of consideration in the light of
which it can be critically analysed. However, based on the law it is a perfectly given
judgement.

12
 CHAPTER IV

CASES IN WHICH PRINCIPLE FOLLOWED

The ratio in this case of Mahadeo Prasad v. State of West Bengal20 was that which was given
by the high court and upheld by the Supreme Court. The ratio was that if the Appellant had at
the time he promised to pay cash against delivery an intention to do so, the fact that he did
not pay would not convert the transaction into one of cheating. But if on the other hand he
had no intention whatsoever to pay but merely said that he would do so in order to induce the
complainant to part with the goods then a case of cheating would be established. There have
been a number of cases in which similar reasoning or rather same reasoning have been given
by courts to decide cheating under section 420 of the IPC. Some of these cases are :-

4.1) Gurcharan Singh Arora v. State.21

In this very recent case in the Delhi High Court, a complaint was filed against the petitioner
for cheating complainant and fraudulently and dishonestly taking an amount of Rs 12,90,000
from her, on false assurance of arranging a shop for her. This payment of money was
supported by two witnesses. There was also evidence showing that after taking the money,
the petitioner locked up his shop and disappeared, as a result of which complainant was
unable to trace him for a long time. The court said that intention of the petitioner should be
there from the beginning and which in this case was present and it upheld the conviction by
the additional sessions judge.

4.2) Inder Mohan Goswami v. State of Uttaranchal22

This case related to cheating and forgery. Cheating is the relevant portion for our use. In this
case the respondents alleged cheating and breach of contract on the part of the part of
appellants. The SHO concluded that the dispute was only of civil nature and no cognisable
offence had been committed. The court held that this case involved a civil offence only and
said that under the offence of cheating, it is the intention which is the gist of the offence. To
hold a person guilty of cheating it is necessary to show that he had a fraudulent or dishonest
intention at the time of making the promise. From his mere failure to subsequently keep a

20
Ibid.
21
2011 CRI. L.J. 1287.
22
AIR 2008 SC 251.

13
promise, one cannot presume that he all along had a culpable intention to break the promise
from the beginning.

4.3) B Suresh Yadav v. Sharifa Bee23

In this case the parties thereto entered into an agreement for sale in respect of a house.
Indisputably two rooms, allegedly, constructed on the said lands were demolished. There
existed a dispute as to whether the property whereupon the said two rooms were allegedly
situated was the same property forming the subject matter of the deed of sale or not. In this
case this fact was known to the plaintiff. Thus the court said that while executing the sale
deed, the appellant herein did not make any false or misleading representation and there had
also not been any dishonest act of inducement on his part to do or omit to do anything which
he could not have done or omitted to have done if he were not so deceived. The ratio in this
case was –“ For the purpose of establishing the offence of cheating, the complainant is
required to show that the accused had fraudulent or dishonest intention at the time of making
promise or representation, mere use of the expression "cheating" in the complaint is of no
consequence.".

23
2008 1 MLJ 1427 (SC).

14
 CHAPTER V

SECTION 415 AND SECTION 420

This chapter deals with the three sections of 415, 417 and 420 of the Indian Penal Code. It is
important to bring in section 417 because it provides for the punishment to the offence of
cheating defined in section 415 of the Indian Penal Code. Thus both of these sections can be
looked at together. The major purpose behind taking this chapter is to find the difference
between the three chapter to find out whether there is any requirement for a different section
on cheating under section 420.

Sections 415 and 420 have been mentioned earlier.24 Section 417 0f the IPC is says that-
“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.”

The major differences between the three sections are discussed as follows :-

1) The major difference between section 415 and 417 on one hand and section 420 is that
section 415 and 417 deal with cheating generally; but Section 420 deals with that species of
cheating which involves delivery of property or destruction of valuable security.25 The
difference could also be understood as where, in pursuance of the deception, no property
passes, the offence is one punishable under Section 417, I.P.C, but where in pursuance of the
deception property is delivered the offence is punishable under Section 420, I.P.C.26 This
does not itself imply the need for a different section. The difference comes from the fact that
the offence under section 420 is an aggravated form of the offence specially dealing with
property and valuable security.27 This point is further expressed in the next point.

2) The vital differences between the offence under ss 417 and 420 IPC is that whereas the
offence against the latter section is a cognisable one, that against the former is a non-
cognisable one and investigation on it can be taken by the police only on the instructions of a
magistrate while in the other case the police can act on their own motion under sections 154

24
Under Chapter 1.
25
Rangayya v. Somappa: AIR 1925 Mad 367.
26
Gobinda Biswas v. State :AIR 1951 Assam 122 cited from Suram Kiran Kumar Reddy And Ors. vs State Of
A.P. And Anr : 2002(2) ALD Cri 835.
27
Supra 25.

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and 156 of the Cr. P.C.28 Further the offence under section 417 is a bailable offence while the
offence under section 420 is a non bailable offence. 29 In addition to this an offence under
section 420 is triable only by a magistrate of first class whereas the offence under section 417
can be tried by any magistrate.30 All these points show the more grievous and aggravated
nature of the offence under section 420 in a way proving that the offence is of more
aggravated form.

3) The punishment under the two sections is different and it also justifies the difference in
nature of the two offences. Under section 417, maximum imprisonment can be one year with
or without a fine whereas under section 420 the maximum punishment is seven years and the
accused shall also be liable to fine.31

All these point show that there is a huge difference between the two sections even though
both deal with cheating and the offence under section 420 is a much more grievous and
aggravated offence. This justifies the need for a separate and a more strict section.

28
Emperor v. Khwaja Nazir Ahmed : AIR 1945 PC 18.
29
Indian Penal Code, 1860.
30
Ibid.
31
Ibid.

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 CHAPTER VI

CONCLUSION

The research project deals with the case of Mahadeo Prasad v. State of West Bengal which is
based on cheating under section 420 of the Indian Penal Code, 1860. The basic issue which
the Supreme Court deals with is that whether there was intention on part of the accused when
the inducement was offered to the complainant. The ratio of the case was that if at the time
the accused promised to pay cash against delivery he had an intention to do so, the fact that
he did not pay would not convert the transaction into one of cheating. But if on the other hand
he had no intention whatsoever to pay but merely said that he would do so in order to induce
the complainant to part with the goods then a case of cheating would be established.

On conceptual analysis it was observed that the offence of cheating under section 420 has
three major ingredients which are :- (i) Cheating ( as contemplated under section 415), (ii)
dishonest inducement to deliver any property to any person or to, make, alter or destroy the
whole, or any part, of the valuable security or anything which is signed or sealed and which is
capable of being converted into any valuable security, and (iii) mens rea of the accused at the
time of making the inducement. In the instant case all three ingredients were present and on
conceptual analysis it was found that the judgement of the case was correct.

The case when analysed showed that the only thing on which the court had to decide was the
intention which the court held was present in this case and it was proved by the evidence that
the accused had no resources to pay cash against delivery. The judgement showed the strong
point of upholding the doctrine of mens rea.

The judgement can be criticised on few points. The first point being that, intention even
though easy to find out in this case is difficult to find in most cases and is very subjective and
leaves a lot of discretion to judges. Further the only point of difference between cheating and
breach of contract is intention. Thus it becomes a prerogative to lay down a more objective
test for these large no. of cases. There is another criticism in form of cases where intention
develops subsequently after the promise and is depicted by certain hypothetical fact situations
in the project. The accused should be punished in these case because of intention but he is not
punished according to the law.

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There have been a lot of judgements which have upheld this principle of presence of intention
at the time when promise was made as a necessary ingredient for cheating. Three very recent
judgements have been used in the project to depict the continuing applicability of the ratio of
this case.

Offences related to cheating are provided under sections 415-420 of the IPC. Section 415
deals with cheating generally. The project raises the issue of need of section 420 when
section 415 is present. It is concluded that section 420 is different from section 415 not only
in substantive nature but also in procedural nature and both justify each other. Section 420 is
a much more grievous and more aggravated form of offence under section 415 and the
procedural aspects of nature of offence, and the punishment justify it. Thus there is a special
need for section 420 of the IPC.

18