Section 420 IPC is now Section 318 of the Bharatiya Nyaya Sanhita, 2023. Cheating and dishonestly inducing delivery of property is punishable with imprisonment up to seven years and fine. Criminal breach of trust, formerly Section 406 IPC, is now Section 316 BNS.
What the prosecution must establish
The critical ingredient is dishonest or fraudulent intention at the very inception of the transaction. It is not enough that a promise was later broken, or that money was not repaid, or that a business failed. The complainant must show that the accused never intended to perform when they made the representation.
A very large number of Section 318 FIRs are commercial disputes: an unpaid loan, a failed partnership, a supply contract gone wrong, a builder who ran out of money. The Supreme Court has repeatedly deprecated giving a civil dispute a criminal colour, and this is one of the recognised Bhajan Lal categories for quashing an FIR under Section 528 BNSS. If the complaint reads like a recovery suit, that is the defence to build.
Immediate steps if you are named
- Anticipatory bail under Section 482 BNSS. The offence is non-bailable.
- Assemble the transaction record: agreements, invoices, bank statements, delivery proof, correspondence. Documentary proof that you performed, or attempted to perform, defeats the allegation of initial dishonest intention.
- Evidence of part performance or part payment is particularly valuable, because it is inconsistent with an intention to cheat from the outset.
- Consider a quashing petition where the dispute is plainly contractual.
If you are the complainant
Be realistic about which remedy actually gets your money back. A criminal case may create pressure, but the court that orders repayment is the civil court, or the Magistrate under Section 138 NI Act if a cheque is involved. Many complainants spend years in a criminal case and never file the recovery suit, by which time it is time-barred. Run the civil remedy in parallel from the start.
Compounding
Cheating is compoundable with the permission of the court in appropriate cases, and where the parties settle, the High Court can quash the proceedings under Section 528 BNSS applying Gian Singh.