Two friends grew up together, studied in the same school, and shared dreams of success. One of them started a small business and trusted his friend enough to invest his savings with him. He was promised high returns, regular profits, and complete transparency. Months passed, and when he finally asked for the promised return, excuses began — “the market is slow,” “the clients haven’t paid yet,” “you’ll get it soon.” Later, he discovered that his friend had used his money to buy property in his own name and never intended to return it.
This is not just a story of broken friendship — it is a story of cheating, a serious criminal offence recognized under Section 318 of the Bharatiya Nyaya Sanhita (BNS). The law sees such deceit not as a mere moral wrongdoing, but as a punishable crime that destroys trust, ruins relationships, and causes financial and emotional damage.
Understanding Section 318 of the Bharatiya Nyaya Sanhita (BNS)
Section 318 of the BNS deals with the offence of cheating — one of the most common forms of criminal fraud in India. It covers all acts where a person deceives another and induces them to deliver property, consent to the retention of property, or to do something that causes harm or damage.
The Section reads:
“Whoever, by deceiving any person, 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 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 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.”
An important explanation follows:
“A dishonest concealment of facts is a deception within the meaning of this section.”
This means that even hiding material facts or information to mislead another person constitutes cheating under the law.
Illustrations: How Cheating Works in Real Life
The law provides practical examples that demonstrate how cheating happens:
- False Identity:
A person pretends to hold a government job and buys goods on credit with no intention of paying. - Fake Branding:
Someone places a counterfeit mark on a product to deceive a buyer into believing it’s a branded item. - False Samples:
A seller shows a false sample to induce a buyer into purchasing poor-quality goods. - Fraudulent Payments:
Issuing a bill or cheque knowing it will be dishonoured. - False Collateral:
Pledging fake or valueless goods as security to get a loan. - Fake Promises:
Promising to repay a loan or deliver goods but never intending to do so. - Concealing Prior Sale:
Selling or mortgaging property already sold to someone else without disclosing it.
Each of these examples reveals a pattern — intentional deception that leads another person to act against their own interest.
Essentials of Cheating under Section 318 BNS
To prove cheating, the following key ingredients must be established:
- Deception:
The accused must have deceived the victim through false representation or concealment of facts. - Fraudulent or Dishonest Intent:
The intention to deceive must exist at the very beginning of the transaction. If the accused developed dishonest intent later, it is not criminal cheating but a civil breach of contract. - Inducement:
The deception must induce the victim to deliver property, consent to retention of property, or act in a way they would not have otherwise. - Resulting Harm:
The victim must have suffered or been likely to suffer loss or damage in body, mind, reputation, or property.
Punishment under Section 318 BNS
Section 318 BNS lays down varying degrees of punishment based on the severity and context of the cheating:
- Basic Cheating:
- Punishment: Up to 3 years of imprisonment, or fine, or both.
- Cheating with Duty of Care (when the accused was bound to protect another’s interest):
- Punishment: Up to 5 years of imprisonment, or fine, or both.
- Cheating Involving Property or Valuable Security:
- Punishment: Up to 7 years of imprisonment, and fine.
The law ensures that the punishment is proportional to the gravity of the deceit and the harm caused.
Difference Between Cheating and Breach of Contract
This distinction is crucial because many people confuse cheating (a criminal offence) with breach of contract (a civil wrong).
| Cheating (Criminal) | Breach of Contract (Civil) |
|---|---|
| Requires dishonest intention from the beginning. | Dishonest intention arises after entering into contract. |
| Punishable with imprisonment and fine. | Results in monetary damages or civil liability. |
| Affects the victim’s mind, property, or reputation. | Affects only contractual rights. |
| Handled by criminal courts. | Handled by civil courts. |
For example, if someone borrows money with the honest intention to repay but later fails due to financial loss, it is not cheating. However, if they borrow knowing they will not repay, it is cheating.
Judicial Interpretation and Case Laws
- Mahadeo Prasad v. State of West Bengal (1954):
The Supreme Court held that to convict a person for cheating, the intention to deceive must exist at the inception of the transaction. - Hridaya Ranjan Prasad Verma v. State of Bihar (2000):
The Court observed that every breach of contract does not amount to cheating. Only if fraudulent intention is present at the beginning can criminal liability arise. - S.W. Palanitkar v. State of Bihar (2002):
The Court reiterated that mere failure to fulfill a promise cannot constitute cheating unless there is evidence of dishonest intent from the start. - G.V. Rao v. L.H.V. Prasad (2000):
The Court emphasized that civil disputes should not be given criminal colour unless deceit and fraudulent intent are clearly established.
These judgments act as safeguards against misuse of the provision while ensuring that genuine victims of fraud receive justice.
Cheating in Modern Contexts
In today’s digital era, cheating takes various forms — from online scams to investment frauds, fake job offers, and cyber fraud. Section 318 BNS covers all such acts, ensuring that deception through emails, websites, or social media can be punished just like physical deceit.
Examples include:
- Fraudulent online sellers taking payments and never delivering goods.
- Fake matrimonial profiles to extort money.
- Ponzi schemes and cryptocurrency scams.
The law’s broad wording — “by deceiving any person” — ensures its applicability to both offline and online offences.
Role of Police and Legal Remedies
When someone is cheated, they can:
- File an FIR under Section 318 BNS at the nearest police station.
- Preserve Evidence such as receipts, messages, or contracts.
- Consult a Lawyer to evaluate whether the matter is civil or criminal.
- Approach a Magistrate Court under Section 190 CrPC if the police fail to act.
A lawyer plays a crucial role in establishing the intention to cheat, differentiating it from mere non-performance of a promise.
Preventive Measures to Avoid Cheating
- Always verify the identity and credentials of individuals or companies.
- Avoid cash transactions without written agreements.
- Never sign documents without reading and understanding them.
- Keep digital records of payments, communications, and commitments.
- Trust must be balanced with legal safeguards like written contracts and receipts.
Conclusion
Section 318 of the Bharatiya Nyaya Sanhita (BNS) acts as a powerful legal protection against deceit, manipulation, and betrayal of trust. Cheating erodes not only financial stability but also emotional and social confidence.
The law ensures that those who intentionally deceive others for personal gain face strict punishment, preserving the foundation of honesty in human dealings.
In every personal or professional relationship, trust is sacred — and when that trust is broken with fraudulent intent, it is not just unethical but criminal. Section 318 BNS ensures that such betrayal does not go unpunished, reaffirming that no one has the right to profit from another’s trust through deceit.
Disclaimer: This information is intended for general guidance only and does not constitute legal advice. Please consult with a qualified lawyer for personalized advice specific to your situation.
Advocate J.S. Rohilla (Civil & Criminal Lawyer in Indore)
Contact: 88271 22304