Over the last thirty years, the Supreme Court of India has made the law on cheating (Sections 318(1)–318(4) BNS) and forgery (Sections 336(1)–340(2) BNS) very clear. The Court has said that criminal law should not be used just to recover money, enforce contracts, or settle business fights.
Cheating means there must be dishonest intention right from the start. If someone takes money promising to deliver goods but never intended to deliver them, that is cheating. But if they tried to deliver and later failed due to business loss, that is not cheating—it is a civil dispute.
Forgery means actually making or altering a false document with intent to deceive. If a person creates a fake property deed to claim land, that is forgery. But if two partners argue about whether a genuine deed is valid, that is only a civil disagreement, not forgery.
These principles help courts separate real crimes (like fraud and fake documents) from ordinary civil disputes (like broken promises or failed business deals).
Cheating and the “Intention at Inception” Doctrine
Cheating under Sections 415 (Section 318 (1)) and 420 IPC (Section 318 (4) BNS) happens only if there was deception right at the start of a deal. The Supreme Court has said that just breaking a promise, losing money in business, or failing to repay does not make it criminal fraud—it is only a civil dispute. In Hridaya Ranjan Prasad Verma v. State of Bihar (2000), the Court ruled that the intent to cheat must exist from the beginning. Later cases like Harmanpreet Singh Ahluwalia (2009), Anil Mahajan (2005), Vijayander Kumar (2014), and Prof. R.K. Vijayasarathy (2019) all confirmed that business disputes or failures cannot be treated as crimes. The clear principle is that cheating requires dishonest intent at inception, not disappointment that comes later.
Forgery and the “False Document” Requirement
Forgery under Sections 318(1)–318(4) BNS is not just about using a false paper—it is about making or changing a document on purpose, knowing it is false. The law says the document must be created or altered with the aim of cheating, causing harm, or helping a false claim. Put simply, a “false document” under Section 335 BNS means there must be fabrication at the time of making, with dishonest intent. Ordinary disputes about whether a document is genuine or valid do not count as criminal forgery.
Leading Judgments on Forgery
The Supreme Court has explained that forgery means deliberately making a false document, not just having a dispute about papers. In Sheila Sebastian v. R. Jawaharaj (2018), it said only the person who actually creates a fake document can be punished. In Mohd. Ibrahim v. State of Bihar (2009), it clarified that signing a paper under a mistaken belief of ownership is not forgery because there is no intent to cheat.
In Ram Narayan Popli v. CBI (2003), the Court stressed that falsity must be real and factual, not just a small error. And in Mir Nagvi Askari v. CBI (2009), it ruled that backdating a document is forgery only if it is done to invent a fake transaction. These cases together show that forgery requires intentional fabrication, and ordinary disputes about whether a document is valid do not count as criminal forgery.
In Jayahari v. State of Kerala (2024), the Court reaffirmed that ordinary partnership or commercial disputes cannot be dressed up as criminal cases under Sections 420 or 467 IPC (318 (4) or 338 BNS) unless the complainant clearly pleads and shows at the inception that the accused acted with dishonest intention; absent such initial deception, the FIR is liable to be quashed.
Similarly, in Rajesh Dhiman v. State of H.P. (2024), the Court delivered a precise exposition on forgery, holding that merely disputing the genuineness of signatures or alleging that a document is “not genuine” does not constitute an offence under Sections 463–471 IPC (336 (1) or 340 (2) BNS) unless there is tangible material showing actual fabrication or making of a false document—civil suspicion cannot substitute criminal ingredients.
Conflating Cheating with Forgery: The Supreme Court’s Caution
The Supreme Court has often warned that cheating cases (Section 420 IPC/318(4) BNS) should not be mixed up with forgery cases (Sections 467, 468, 471 IPC/338, 336(3), 340(2) BNS) just to make civil disputes look like crimes. Magistrates must check complaints carefully and reject vague or exaggerated claims. In Thermax Ltd. v. K.M. Johny (2011), the Court said criminal law cannot be used to pressure parties in business disputes. In Vesa Holdings v. State of Kerala (2015), it ruled that charges must clearly show someone’s role in making false documents and cheating. In Sarabjit Kaur v. State of Punjab (2023), it criticised the misuse of cheating/forgery charges in partnership and property fights. The clear message is that criminal law should not be misused to settle private civil disputes.
Quashing FIRs: The Bhajan Lal Safeguard
The Supreme Court often uses its special powers under Section 482 CrPC/528 BNSS and Article 226 to stop people from misusing criminal law. Following the seven rules laid down in the Bhajan Lal case (1992), the Court quashes FIRs in cheating and forgery matters when no offence is shown on the face of the complaint, when the claims are absurd or unlikely, or when the case is clearly filed with bad intentions. For example, in Vineet Kumar v. State of U.P. (2017) an international business dispute was treated as civil, in Anand Kumar Mohatta v. State (2019) a shareholding dispute lacked initial cheating, and in Satishchandra Ratanlal Shah (2019) no false document was made. These rulings show that criminal courts should not be dragged into private contract disputes, and criminal law must be used only for real crimes.
Cheating vs. Forgery – Investigation Procedure
|
Aspect |
Cheating (Sections 415, 420 IPC / 318 BNS) |
Forgery (Sections 467–471 IPC / 336–340 BNS) |
|
Core Idea |
Deception at the very start of a transaction |
Fabrication of a false document with intent to deceive |
|
Key Requirement |
Proof of dishonest intention at inception |
Proof of actual creation/alteration of a false document |
|
Evidence Focus |
· Statements showing false promises · Circumstances proving intent to cheat · Financial transactions |
· Existence of a fake or altered document · Expert verification of handwriting/signatures · Proof of fabrication |
|
Mens Rea (Mental State) |
Must show intent to cheat from the beginning |
Must show knowledge of falsity and intent to cause harm or gain |
|
Common Misuse |
Civil disputes (contracts, loans, partnerships) wrongly turned into criminal cases |
Genuine documents disputed for validity treated as forgery without proof of fabrication |
|
Supreme Court Principles |
· Hridaya Ranjan Prasad Verma (2000): Intent at inception is key · Prof. R.K. Vijayasarathy (2019): Business failures not crimes |
· Sheila Sebastian (2018): Only maker of false document liable · Mohd. Ibrahim (2009): Mistaken belief ≠ forgery |
|
Investigation Steps |
· Register FIR only if deception is clear · Collect contracts, receipts, witness statements · Rule out civil nature |
· Seize suspected documents · Forensic examination · Trace who fabricated or altered the document |
|
Examples |
· Taking advance money for goods never intended to be delivered = cheating · Business loss after genuine attempt ≠ cheating |
· Creating a fake property deed = forgery · Dispute over genuine deed’s validity ≠ forgery |
|
Final Principle |
Civil wrongs → Civil courts |
Criminal law reserved for genuine fabrication |
This table makes the differences crystal clear:
- Cheating = dishonest intent at the start.
- Forgery = making a false document.
Conclusion
The Supreme Court has made it clear that not every broken promise or civil dispute is a crime. Just because someone fails to keep a promise or there’s a disagreement over money or property, it doesn’t mean they should face criminal charges. Criminal law should only be used when there is real intent to cheat from the beginning or when someone creates a fake document. Otherwise, using criminal cases to pressure or harass someone is wrong. The Court has repeatedly said that civil matters belong in civil courts, and criminal law should only deal with actual crimes—not be misused for personal revenge.
