Section 420 IPC: Cheating Law Explained with Real Cases and Latest Updates

Synopsis (Index)

What is Section 420 IPC?
Key Facts & Legal Implications of IPC 420
Test Your Knowledge: AIBE Practice MCQs on Section 420
Condition-Based Questions on Cheating under Section 420 IPC
Problem-Based Practice Questions on 420 IPC
Important Case Laws
- Hridaya Ranjan Prasad Verma v. State of Bihar
- Devender Kumar Singla v. Baldev Krishan Singla
- S.W. Palanitkar & Ors. v. State of Bihar & Anr.
Final Thoughts
- Section 420 IPC Explained
- Essential Elements of Section 420
- Punishment under Section 420 IPC
- Examples of IPC Section 420

What is Section 420 IPC?

420. Cheating and dishonestly inducing delivery of property.— Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, 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.

Section 420 IPC is basically the same as Section 318(4) BNS.

Key Facts & Legal Implications of IPC 420

Section: 420 IPC
Offence: Cheating and thereby dishonestly inducing delivery of property, or the making, alteration or destruction of a valuable security.
Punishment: Imprisonment for 7 years and fine.
Cognizable or non-cognizable: Cognizable
Bailable or Non-bailable: Non-bailable
By what Court triable: Magistrate of the first class.

Test Your Knowledge: AIBE Practice MCQs on Section 420

Q1. What is the maximum punishment under Section 420 of the Indian Penal Code?

A. 3 years imprisonment and fine
B. 5 years imprisonment and fine
C. 7 years imprisonment and fine
D. Life imprisonment

Answer: C. 7 years imprisonment and fine
Explanation: Section 420 IPC provides for imprisonment of either description for a term which may extend to seven years, and also makes the person liable to fine.

Q2. Which of the following elements are essential for the offence under Section 420 IPC?

A. Mere breach of contract
B. Dishonest inducement and cheating
C. Loss of property without inducement
D. Intention to defame

Answer: B. Dishonest inducement and cheating
Explanation: Section 420 IPC requires cheating and dishonestly inducing the deceived person to deliver property or alter/destroy a valuable security.

Q3. Under Section 420 IPC, the offence is committed when:

A. A person forgets to return borrowed money
B. A person unintentionally causes loss
C. A person dishonestly induces another to deliver property
D. A person refuses to perform a contract

Answer: C. A person dishonestly induces another to deliver property
Explanation: The key ingredient is dishonest inducement after cheating, leading the victim to deliver property or alter/destroy a valuable security.

Q4. Which of the following is not required to constitute an offence under Section 420 IPC?

A. Intention to deceive
B. Delivery of property
C. Use of physical force
D. Dishonest inducement

Answer: C. Use of physical force
Explanation: Section 420 deals with cheating and dishonest inducement, not physical force. It is a non-violent economic offence.

Q5. “Valuable security” in Section 420 IPC refers to:

A. Gold or jewellery
B. Any document which can be legally enforced
C. Any movable property
D. Electronic gadgets

Answer: B. Any document which can be legally enforced
Explanation: A valuable security is defined under Section 30 IPC and refers to a document creating or extinguishing a legal right.

Q6. Section 420 IPC is classified as a:

A. Bailable and non-cognizable offence
B. Non-bailable and non-cognizable offence
C. Bailable and cognizable offence
D. Non-bailable and cognizable offence

Answer: D. Non-bailable and cognizable offence
Explanation: Cheating under Section 420 IPC is considered a serious offence, and is therefore cognizable (police can arrest without warrant) and non-bailable.

Q7. Which of the following is an example of an offence under Section 420 IPC?

A. Not paying electricity bill
B. Selling fake gold as real gold knowingly
C. Failing to attend a court hearing
D. Causing hurt to someone

Answer: B. Selling fake gold as real gold knowingly
Explanation: This involves cheating and dishonest inducement to deliver money/property based on false representation.

Q8. To prosecute someone under Section 420 IPC, which of the following must be proved?

A. Mere breach of contract
B. Criminal intention at the time of inducement
C. Post-transaction failure
D. Civil liability

Answer: B. Criminal intention at the time of inducement
Explanation: For Section 420 IPC, intention to cheat must exist at the very beginning of the transaction, not developed later.

Q9. Under Section 420 IPC, the inducement must result in:

A. Emotional distress
B. Civil liability
C. Delivery of property or alteration of valuable security
D. Mere inconvenience

Answer: C. Delivery of property or alteration of valuable security
Explanation: The section clearly states that cheating must lead to delivery of property or making, altering, destroying valuable security.

Q10. Which of the following is a correct pair?

A. Section 415 – House trespass
B. Section 420 – Dishonestly inducing delivery of property
C. Section 441 – Cheating
D. Section 379 – Criminal breach of trust

Answer: B. Section 420 – Dishonestly inducing delivery of property
Explanation: Section 420 deals specifically with cheating and dishonestly inducing delivery of property. Other options are mismatched.

Condition-Based Questions on Cheating under Section 420 IPC

Q1. If a person makes a false statement believing it to be true, will it amount to cheating under Section 420 IPC?

A) Yes
B) No
C) Only if property is delivered
D) Only if it causes loss

Answer: B) No
Explanation: For cheating, there must be knowledge that the statement is false and intention to deceive. Here, there is no dishonest intention.

Q2. If the accused had no dishonest intention at the beginning of the transaction, can he be convicted under Section 420 IPC?

A) Yes
B) No
C) Depends on the result
D) Only if property delivered

Answer: B) No
Explanation: Dishonest intention must exist at inception. Later failure is only breach of contract, not cheating.

Q3. If the person deceived suffers no loss, but deception occurred, is Section 420 IPC attracted?
A) Yes
B) No
C) Partially
D) Depends on motive

Answer: B) No
Explanation: Section 420 requires dishonest inducement resulting in delivery and wrongful loss or gain.

Q4. If A induces B to sign a false document but no money is taken, does it amount to cheating?

A) Yes
B) No
C) Only if document is valuable security
D) Both A and C

Answer: D) Both A and C
Explanation: Section 420 covers inducing someone to make, alter, or destroy valuable security.

Q5. If the accused simply fails to perform a promise later, without dishonest intent, is it cheating?

A) Yes
B) No
C) Yes, always
D) Only if payment made

Answer: B) No
Explanation: Failure to perform a genuine promise is a civil matter, not criminal cheating.

Q6. If consent for delivery of property is obtained by deception, does it amount to cheating?

A) Yes
B) No
C) Only if written
D) Only if government property

Answer: A) Yes
Explanation: Consent obtained through deception is not free consent and satisfies ingredients of Section 420.

Q7. If a person deceives someone with a false job offer and takes money, does it amount to cheating?

A) Yes
B) No
C) Civil wrong only
D) Only if job was government

Answer: A) Yes
Explanation: False representation + dishonest inducement + property delivered = Cheating under Section 420.

Q8. A borrows money and later becomes insolvent. Does it amount to cheating?

A) Yes
B) No
C) Only if he lied initially
D) Depends on repayment

Answer: C) Only if he lied initially
Explanation: Insolvency alone is not cheating; initial fraudulent intention must be proven.

Q9. If A induces B to destroy a valuable bond by saying it’s renewed, does it fall under Section 420?

A) Yes
B) No
C) Only if money involved
D) Only under forgery

Answer: A) Yes
Explanation: Deception causing destruction of valuable security is specifically covered under Section 420 IPC.

Q10. If accused alters a signed document without permission, what is the correct offence?
A) Only cheating
B) Only forgery
C) Cheating and forgery both
D) No offence

Answer: C) Cheating and forgery both
Explanation: Forgery is the act, but if done to obtain property dishonestly, Section 420 also applies.

Q11. If property is delivered voluntarily under false belief, can Section 420 apply?

A) Yes
B) No
C) Only if forced
D) Depends on loss

Answer: A) Yes
Explanation: Delivery under false belief due to deceit is dishonest inducement – the essence of Section 420.

Q12. If accused deceives but no property or security is delivered, what offence arises?

A) No offence
B) Attempt to cheat (Section 511 IPC)
C) Civil wrong
D) Criminal breach of trust

Answer: B) Attempt to cheat (Section 511 IPC)
Explanation: If delivery not completed, it is attempt to commit cheating.

Problem-Based Practice Questions on 420 IPC

Q1. A sells fake gold as real gold to B. B pays ₹10,000.

A) Civil wrong only
B) Cheating under Section 420
C) Criminal breach of trust
D) Misrepresentation

Answer: B) Cheating under Section 420
Explanation: False representation + dishonest inducement + delivery of property = Cheating.

Q2. A borrows ₹1,00,000 from B promising repayment but fails due to loss in business.

A) Cheating
B) Civil breach of contract
C) Fraud
D) Both cheating and fraud

Answer: B) Civil breach of contract
Explanation: There was no dishonest intention at inception, hence not cheating.

Q3. A induces B to sign a blank cheque “for verification” and later withdraws ₹50,000.

A) No offence
B) Forgery only
C) Cheating under Section 420
D) Civil liability

Answer: C) Cheating under Section 420
Explanation: Inducing to sign + dishonestly using it to obtain money = Cheating.

Q4. A, pretending to be a government officer, takes ₹10,000 from B for a job.

A) No offence
B) Cheating under Section 420
C) Forgery
D) Criminal intimidation

Answer: B) Cheating under Section 420
Explanation: False identity + dishonest inducement + property = offence.

Q5. A agrees to sell land to B and takes advance but sells to C later.

A) Cheating
B) Civil breach
C) Misrepresentation
D) Criminal breach of trust

Answer: B) Civil breach
Explanation: Unless fraudulent intention existed from beginning, it’s not cheating.

Q6. A forges documents and gets a bank loan.

A) Only cheating
B) Only forgery
C) Both cheating and forgery
D) Criminal breach of trust

Answer: C) Both cheating and forgery
Explanation: Forged documents used to obtain property dishonestly → both offences.

Q7. A lies that a bond has expired, making B destroy it.

A) No offence
B) Cheating under Section 420
C) Criminal breach of trust
D) Forgery

Answer: B) Cheating under Section 420
Explanation: Destruction of valuable security by deceit = covered in Section 420 IPC.

Q8. A persuades B to invest ₹5 lakh in a fake company showing false documents.

A) Civil liability only
B) Cheating under Section 420
C) Breach of contract
D) Fraud under Contract Act

Answer: B) Cheating under Section 420
Explanation: False representation and dishonest inducement causing loss = offence.

Q9. A obtains goods on credit pretending to be rich, though bankrupt.

A) Cheating under Section 420
B) Civil dispute
C) Breach of trust
D) None

Answer: A) Cheating under Section 420
Explanation: Misrepresentation of financial position + dishonest inducement = cheating.

Q10. A issues a post-dated cheque knowing he has no funds.

A) Section 138 NI Act offence
B) Section 420 IPC
C) Both, depending on intent
D) None

Answer: C) Both, depending on intent
Explanation: If issued dishonestly to deceive → 420 IPC; if only bounced → 138 NI Act.

Q11. A induces B to sign a document saying it’s a letter, but it’s a promissory note.

A) Cheating under Section 420
B) Forgery
C) Both
D) No offence

Answer: A) Cheating under Section 420
Explanation: Deception in signing a valuable security = cheating.

Q12. A collects money pretending to be a company’s agent.

A) No offence
B) Civil matter
C) Cheating under Section 420
D) Breach of trust

Answer: C) Cheating under Section 420
Explanation: False representation as agent + money received = cheating.

Q13. A persuades B to destroy evidence saying “case withdrawn.”

A) Cheating
B) Forgery
C) Criminal breach of trust
D) No offence

Answer: A) Cheating
Explanation: Inducing destruction of document = Section 420.

Q14. A promises to marry B, takes ₹2 lakh, and never intended to marry.

A) Civil wrong
B) Cheating under Section 420
C) Breach of promise
D) None

Answer: B) Cheating under Section 420
Explanation: Promise made without intention to perform → dishonest inducement.

Q15. A gives fake receipt for goods worth ₹50,000.

A) Cheating under Section 420
B) Forgery only
C) Civil wrong
D) Both A and B

Answer: D) Both A and B
Explanation: Using false document dishonestly to obtain property = cheating and forgery.

Q16. A advertises foreign tours, collects money, and disappears.

A) Civil case
B) Cheating under Section 420
C) Misrepresentation
D) No offence

Answer: B) Cheating under Section 420
Explanation: False representation with dishonest intention and property delivery.

Q17. A, a government clerk, collects money saying he’ll arrange jobs.

A) No offence
B) Cheating under Section 420
C) Criminal breach of trust
D) Extortion

Answer: B) Cheating under Section 420
Explanation: False assurance of job with gain = cheating.

Q18. A withdraws extra money due to bank error, knowing it’s not his.

A) No offence
B) Cheating under Section 420
C) Criminal breach
D) Fraud

Answer: B) Cheating under Section 420
Explanation: Dishonest inducement and wrongful gain = offence.

Q19. A promises college admission, takes money but not authorized.

A) Cheating under Section 420
B) Civil matter
C) None
D) Forgery

Answer: A) Cheating under Section 420
Explanation: False representation and dishonest inducement.

Q20. A persuades B to sign an old blank form saying “just for records” but fills it as a loan document.

A) Cheating under Section 420
B) Civil fraud
C) Forgery only
D) None

Answer: A) Cheating under Section 420
Explanation: Misrepresentation in signing a document = deception covered by Section 420.

Important Case Laws That Define IPC Section 420

1. Hridaya Ranjan Prasad Verma v. State of Bihar (2000): Supreme Court on Breach of Contract vs Criminal Cheating

Facts of the Case

The appellants — Hridaya Ranjan Prasad Verma and his two brothers — sold land inherited from their father to Kanishka Sahkari Grih Nirman Samiti Ltd., a housing cooperative society represented by respondent No. 2, Manish Prasad Singh.
The sale consideration was ₹16,00,000. Out of this, ₹11,00,000 was paid by bank drafts at the time of executing the registered sale deed.
For the remaining ₹5,50,000, respondent No. 2 issued three cheques, which were dishonoured due to insufficient funds.
The appellants filed an FIR under Sections 406, 420, and 120B IPC against the respondent for cheating and breach of trust.
In retaliation, respondent No. 2 filed a criminal complaint (No. 1282/95) against the appellants, alleging offences under Sections 418, 420, 423, 469, 504, and 120B IPC, claiming that they had concealed the existence of a pending partition suit and thus deceived him into buying the property.
The appellants sought quashing of this complaint, arguing that it was a counterblast to their own case and did not constitute a criminal offence.
The Patna High Court refused to quash the proceedings, leading to the present appeal before the Supreme Court.

Issues

Whether the allegations made in the complaint disclose the commission of any offence under Sections 418, 420, 423, 469, 504, and 120B IPC?
Whether the complaint amounts to a mere breach of contract or constitutes the offence of cheating under Section 420 IPC?
Whether the criminal proceedings initiated by the respondent amount to an abuse of the process of law, warranting quashing under the principles laid down in State of Haryana v. Bhajan Lal (1992 Supp. 1 SCC 335)?

Analysis

The Supreme Court referred to State of Haryana v. Bhajan Lal (1992), which laid down categories of cases where the Court can quash criminal proceedings to prevent abuse of process.
The Court examined the definition of “cheating” under Section 415 IPC, which requires:
1. Deception of a person; and
2. Fraudulent or dishonest inducement at the time of the transaction to deliver property or to act in a way causing harm.
The Court emphasized the distinction between breach of contract and cheating:
- A mere failure to fulfill a promise or contract does not amount to cheating.
- There must be fraudulent or dishonest intention at the inception of the transaction.
In the present case, even if all allegations were taken as true, there was no evidence or averment of fraudulent intention when the appellants entered into the sale.
The non-disclosure of a pending partition suit or subsequent disputes did not by itself prove deceitful intent.
The complaint lacked the core element of dishonest intention, and thus, ingredients of cheating under Section 420 IPC (and allied offences) were not satisfied.

Judgment

The Supreme Court held that:
- The complaint did not disclose any prima facie offence under Sections 418, 420, 423, 469, 504, or 120B IPC.
- The allegations, at best, indicated a civil dispute or breach of contract, not a criminal act.
- The case fell within the first category of Bhajan Lal, i.e., when allegations even if taken at face value do not constitute an offence.
Therefore, the continuation of criminal proceedings would be an abuse of the process of the court.
The Court set aside the Patna High Court’s order and quashed Criminal Case No. 22/96 pending before the Chief Judicial Magistrate, Siwan.

2. Devender Kumar Singla v. Baldev Krishan Singla (2004) 2 SCR 459: Supreme Court on Fraudulent Intention and Cheating Under Section 420 IPC

Facts of the Case

On 7 August 1992, the complainant Dr. Baldev Krishan Singla sold 7,000 Master Plus shares worth ₹1,69,000 to Devender Kumar Singla (accused no. 1) and his wife Mala Singla (accused no. 2).
The complainant delivered the shares to Devender, who signed a receipt (Ex. PW3/B) acknowledging receipt and issued a post-dated cheque (No. 447131) drawn on the New Bank of India, Moga, payable on 8 August 1992.
When presented, the cheque was dishonoured because payment had been stopped by the drawer. Despite repeated requests, payment was not made.
Consequently, the complainant filed a criminal complaint under Sections 420 (cheating) and 109 IPC (abetment) before the Sub-Divisional Judicial Magistrate, Moga.
The Trial Court acquitted both accused, holding that:
- The alleged delivery of shares was not proved.
- Ownership or existence of the shares was not established.
- The complainant failed to produce any documentary evidence or transfer records.
On appeal, the Punjab and Haryana High Court:
- Convicted Devender Kumar Singla under Section 420 IPC, sentencing him to one year imprisonment and a fine of ₹10,000.
- Acquitted Mala Singla, finding insufficient evidence of her involvement.
Devender appealed his conviction, while the complainant appealed against Mala’s acquittal to the Supreme Court of India.

Issues

Whether the essential ingredients of the offence of cheating under Section 420 IPC were proved against Devender Kumar Singla?
Whether the High Court erred in reversing the acquittal of Devender and convicting him?
Whether the acquittal of Mala Singla was justified in the absence of direct involvement?
Whether the circumstances showed a dishonest or fraudulent intention at the time of issuing the cheque?

Analysis

The Supreme Court examined the definition of “cheating” under Section 415 IPC, which requires:
1. Deception of a person;
2. Fraudulent or dishonest inducement to deliver property or to consent to its retention; and
3. Mens rea (dishonest intention) at the time of inducement.
Referring to Bashirbhai Mohamedbhai v. State of Bombay (AIR 1960 SC 979) and Shivanarayan Kabra v. State of Madras (AIR 1967 SC 986), the Court reiterated that dishonest intention can be inferred from conduct and surrounding circumstances and need not always be proved by direct evidence.
In this case:
- Devender acknowledged receipt of the shares in a written receipt (Ex. PW3/B).
- The cheque was intentionally dishonoured, with payment stopped before the due date — suggesting fraudulent intent.
- The receipt clearly recorded that the shares were delivered, and the defence plea that it was an “advance receipt” was never raised during the trial or suggested in cross-examination.
- The accused’s claim that the transaction occurred on 27 July 1992, not 7 August 1992, was inconsistent and unsupported by evidence.
- The stoppage of payment on 1 August 1992, before the cheque’s due date, indicated premeditated deceit.
he Court also noted that under Section 313 CrPC, the accused’s statement is not evidence, but merely an opportunity to explain incriminating material — hence, his denial could not displace the documentary proof.

Regarding Mala Singla, the Court found:

Her presence at the transaction was not established.
Although she signed the cheque, it was issued and handed over by Devender.
Therefore, no deception or fraudulent inducement could be attributed to her.

Judgment

The Supreme Court upheld the conviction of Devender Kumar Singla under Section 420 IPC, confirming that:
- He had dishonestly induced the complainant to deliver shares.
- His conduct—stopping payment after acknowledging receipt—established mens rea at the inception of the transaction.
However, the Court reduced the sentence of imprisonment from one year to three months, considering the peculiar facts and absence of prior criminality.
The appeal of the complainant against the acquittal of Mala Singla was dismissed, confirming her innocence due to lack of evidence.

3. S.W. Palanitkar & Ors. v. State of Bihar & Anr. (2001) AIR 2001 SC 2960; (2002) 1 SCC 241

FACTS

The appellant company, S.W. Palanitkar & Co., entered into an agreement on 21 February 1995 with Respondent No. 2, appointing him as a consignment stockist for fertilizers.
The agreement, initially valid until 20 February 1996, was later extended until 31 March 1997.
On 3 October 1997, the respondent demanded payment of ₹15 lakhs or arbitration as per the agreement clause.
After disputes arose over supply terms, the respondent filed a criminal complaint on 8 December 1997, alleging offences under Sections 406 (Criminal Breach of Trust), 420 (Cheating), and 120B (Criminal Conspiracy) IPC.
The Chief Judicial Magistrate, Patna, issued summons against the appellants. The High Court upheld this decision, leading to the present appeal before the Supreme Court.

ISSUES

Whether the allegations made in the complaint constituted offences under Sections 406, 420, and 120B IPC.
Whether the dispute between the parties was civil in nature and hence not subject to criminal prosecution.
Whether the High Court erred in refusing to exercise its inherent powers under Section 482 Cr.P.C. to quash the proceedings.

ANALYSIS

The Court reiterated that every breach of contract or trust does not amount to a criminal offence unless there is clear evidence of fraudulent or dishonest intention at the inception of the transaction.
For Section 406 IPC, there must be:
- Entrustment of property, and
- Dishonest misappropriation of that property.
  These ingredients were absent in this case.
For Section 420 IPC (Cheating), it must be shown that the accused had a fraudulent or dishonest intention at the time of making the promise. Mere failure to perform later does not constitute cheating.
The Court referred to Hridaya Ranjan Prasad Verma v. State of Bihar (2000) and G.V. Rao v. L.H.V. Prasad (2000), emphasizing that the intention to deceive must exist at the inception of the transaction.
The Court observed that the dispute arose purely from a commercial contract, covered under the arbitration clause, and thus the complainant’s remedy lay in civil or arbitral proceedings, not criminal prosecution.
It cautioned Magistrates to avoid issuing process mechanically and to prevent the criminal process from being used as a tool of harassment or vengeance.

JUDGMENT

The Supreme Court held that:
- No entrustment of property or dishonest intention was shown against appellants 1–6 and 8.
- Only Appellant No. 7 (A.B. Desai) could be proceeded against under Section 420 IPC, since there was a prima facie case of inducement.
- The Court set aside the summons against appellants 1–6 and 8, and quashed charges under Sections 406 and 120B IPC.
The complaint could proceed only under Section 420 IPC against appellant 7.
Appeal partly allowed.

Final Thoughts: Why Section 420 IPC Still Matters in Modern India

Section 420 IPC Explained

Section 420 IPC is a serious form of cheating (which is defined under Section 415 IPC). While Section 417 IPC provides the punishment for simple cheating, Section 420 comes into play when the cheating specifically leads to two serious outcomes:

Dishonestly inducing the delivery of property to any person.
Dishonestly inducing the person deceived to make, alter, or destroy any part of a valuable security or anything that can be converted into one (like a signed blank cheque, bond, or promissory note).

Essentially, it’s about cheating someone out of their property or vital documents.

The text of the section, as per the bare act, is:

“Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, 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.”

Essential Elements of Section 420

For a person to be charged and convicted under Section 420 IPC, the prosecution must definitively establish the following elements:

Cheating: The accused must have cheated the victim (as defined in Section 415 IPC). Cheating itself requires two components:
- Deception: The accused must have actively deceived the person.
- Fraudulent/Dishonest Inducement: The deception must have led to the victim being induced to act or omit to act.
Dishonest Inducement: This is crucial. The inducement must be dishonest—meaning the accused intended to cause wrongful gain to himself or wrongful loss to the victim.
Delivery of Property (or related action): The dishonest inducement must have led the victim to:
- Deliver any property (e.g., money, goods, immovable property, etc.) to the accused or any other person.
- OR Make, alter, or destroy a valuable security (e.g., signing over a deed, cancelling a bond, or signing a blank form that is a valuable security).
Causal Connection: There must be a direct link—the cheating must be the cause that led to the delivery of property or the creation/alteration of the valuable security.

Key point: The intention to deceive and dishonestly induce the delivery of property must be present at the very beginning (from the inception of the transaction). This is what distinguishes a criminal offence under Section 420 from a mere breach of contract, which is civil in nature.

Punishment under Section 420 IPC

The offence under Section 420 IPC is a serious one, which is reflected in the maximum penalty:

Imprisonment: Extended up to seven years.
Fine: The person shall also be liable to a fine.

This offence is cognizable (Police can arrest without a warrant), non-bailable (Bail is at the discretion of the court), and triable by a Magistrate of the First Class.

Illustrative Examples of IPC Section 420

Example 1: Property Delivery (Money)

A person, A, approaches B and falsely represents himself as a Government employee who can get B a high-paying job in exchange for a “security deposit” of ₹5 lakhs.
B, believing A’s false statement (Deception), hands over the ₹5 lakhs to A (Delivery of Property).
A had no intention of getting B a job; his only intention was to fraudulently take the money (Dishonest Inducement).
Result: This is a clear case of Section 420.

Example 2: Valuable Security

X owes money to Y. X misrepresents his current financial health, telling Y he has a sudden, urgent need for cash for a medical emergency, and convinces Y to sign a blank promissory note (a form of Valuable Security) as collateral for a short-term loan.
X had no medical emergency and his true intention was to fraudulently fill in a much larger amount on the note later to cheat Y.
Result: X has dishonestly induced Y to make/alter a valuable security and is liable under Section 420.

Example 3: Fictitious Transaction (E-commerce/Online Scams)

C posts an advertisement online offering a rare antique statue for sale for ₹50,000 and provides genuine-looking but fake pictures.
D pays the ₹50,000 advance to C’s bank account (Delivery of Property).
C has no statue and disappears after receiving the money (Cheating with Dishonest Inducement).
Result: C has cheated D and dishonestly induced the delivery of property (money) and is liable under Section 420.

References