Introduction

 

It’s common in India for disagreements about money, property, or contracts to turn bitter. Sometimes, one party feels “cheated” and decides to file a criminal complaint instead of or in addition to a civil case.

Nonetheless, not every failed deal, unpaid bill, or contractual breach amounts to “cheating” in the eyes of law. Indian courts are very clear: for a criminal case of cheating to stand, there must be dishonest intention right from the beginning.

This article explains in simple terms what the offence of “cheating” means, when it applies, and how the courts in India treat such cases.

1. What is ‘Cheating’ Under Indian Law?

The law on cheating comes from Section 415 of the Indian Penal Code, 1860 (IPC) and, after the new law took effect, from Section 318 of the Bharatiya Nyaya Sanhita, 2023 (BNS).

In simple words, a person commits cheating when they:

• Deceive someone (tell a lie, hide facts, or make a false promise),
• Do it dishonestly, and
• Cause the other person to give up property, money, or take an action that leads to harm or loss.

Section 420 IPC (now Section 319 BNS) further punishes “cheating and dishonestly inducing delivery of property.”

Punishment: up to 7 years of imprisonment and fine.

2. Civil vs. Criminal [The Difference]

A civil dispute usually involves a broken promise, delay, or non-payment, e.g., if someone doesn’t return your loan or fails to complete a construction project on time.

A criminal cheating case, on the other hand, requires dishonesty from day one. Courts have repeatedly said^1,2:

In Kunti and Another v. State of Uttar Pradesh and Another, this Court referred to Sarabjit Kaur v. State of Punjab and Another wherein it was observed that a breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Merely on the allegation of failure to keep a promise will not be enough to initiate criminal proceedings.

Example:

• If a builder takes money for an apartment and later delays construction because of financial troubles, that’s a civil wrong and the only valid remedy is initiating a civil action.
• If the builder takes money for an apartment that is not his to sell, that’s a crime and criminal law can be invoked, even if a civil action for recovery is also filed.

3. Ingredients of Cheating (Explained with Simple Examples)

To file a valid cheating case, the following must be shown clearly:

Requirement	Meaning in Simple Words	Illustration
False Representation	The accused lied or hid material / important facts.	A seller represents clear property title knowing there’s an existing mortgage.
Dishonest Intention at the Beginning	The accused never planned to keep his promise.	A developer takes booking amounts knowing he has no land or approval.
Inducement (You Acted Because of It)	You paid or acted because you believed the false statement.	You pay advance after being told approvals exist.
Loss to You / Gain to Them	You suffered a financial or legal loss while they benefited.	Your advance is not returned, and the project never starts.

If any of these elements is missing, it is likely to remain a civil dispute, not a criminal offence.

4. How Indian Courts View These Cases

Indian courts regularly deal with cases where civil disagreements are dressed up as criminal cheating. The general judicial approach is^3,4,5:

• No criminal case is made out without dishonest intent from the start.
• Breach of contract ≠ cheating.
• Misuse of criminal law is frowned upon – recently, the Supreme Court in Arshad Neyaz Khan vs. State of Jharkhand and Ors. observed:

“Criminal law ought not to become a platform for initiation of vindictive proceedings to settle personal scores and vendettas.”

5. Takeaway

• Not every failed promise is a crime. To prove cheating, it must be shown that the person intended to deceive from the very start, not merely that they broke a promise later.
• Filing criminal cases for civil disputes can backfire — courts can dismiss them and even impose costs. On the other hand, if there is clear deception, the law provides strong remedies under Section 420 IPC / Section 319 BNS.
• When in doubt, seek legal advice before turning a civil dispute into a criminal one.

 

References

 

 

1. (2023) 6 SCC 109.
2. (2023) 5 SCC 360.
3. Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168.
4. (2023) 5 SCC 360.
5. Arshad Neyaz Khan vs. State of Jharkhand and Ors., 2025 INSC 1151