Section 415 of the Indian Penal Code

Cheating is that offense which is understood even by a layman. Often people use the term ‘cheating’ whereby they mean something to be deceitful or fraudulent. Cheating is considered as a wrong act when done, even in some of the trivial issues. Section 415 of IPC (India Penal Code), 1860 defines ‘Cheating’ and this article would be discussing the legal definition and legal aspect of the offense of cheating.

Section 415 – Cheating

Cheating is defined under Chapter XVII which deals with ‘Offences against Property‘ under Section 415 as follows-

Cheating.—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”.

Explanation.—A dishonest concealment of facts is a deception within the meaning of this section.[1]

From the above-mentioned definition, some of the basic elements of cheating are as follows-

Fraudulently  

The act should either be fraudulent or dishonest to be termed as under the offense of cheating. The term ‘fraudulently’ is defined under Section 25 of the IPC.

“A person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise.”[2]

Acting dishonestly

The intention of the wrongdoer in every criminal offense is of great importance. Therefore, in cheating, also the person who commits the offense should act dishonestly. The term ‘dishonesty’ is defined under Section 24 of the IPC.

“Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing “dishonestly”.[3]

Property

Section 415 comes under Chapter XVII, which makes the offense of Cheating that is committed against property.

Deceive

The accused must deceive the person in such a way that he is induced to deliver any property or gives consent to the accused to retain a property that he posses. Also, it is very important to note down here that the deception should be with a dishonest or fraudulent intention.[4]

All the elements of cheating specified under Section 415 should be connected to each other in order to make an offense of cheating.

As per the Supreme Court very clearly held that the crux of the offense of cheating is the intention of the person who induces the victim of his representation. The nature of the transaction is irrelevant, which would become decisive in discerning whether there was the commission of an offense or not.[5]

The Supreme Court in a case held that in order to convict a person under the offense of cheating there should be the pre-existing fraudulent or dishonest intention of the accused from the beginning whereas in case of breach of contract the dishonest intention is generally not present at the beginning of the agreement. [6]

Punishment of Cheating

Cheating is punishable under section 417, and the punishment for cheating is imprisonment up to 1 year or fine or both. [7]Imprisonment depends upon the cheating and quantum of the act. If the act is grave, imprisonment and fine, both can be awarded. Whereas, when the act committed is not grave imprisonment is generally not imposed.

Difference between Cheating and Fraud

The offense of cheating and fraud are almost similar, and therefore, sometimes there is confusion between the two. It is very important to know the differences between the two.

1. The offense of Cheating is mentioned under section 415-420 of the Indian Penal Code, 1860, whereas, fraud is mentioned under 421-424 of the Indian Penal Code, 1860.
2. Usually, cheating is committed to obtaining some advantage from a person. Fraud is committed to gain an advantage by another’s loss.
3. Fraud basically is confined to contract cases, but cheating has a wide ambit.

Conclusion

The offense of Cheating, which is very common, includes two main elements, that is deception and inducement. Sometimes cheating is confused with fraud or other civil or criminal offense, but it differs from all of them in one way or the other. Therefore, the conceptual understanding of the offense of cheating becomes very important. Apart from section 415, another section related to cheating are also important.

[1] Indian Penal Code, 1860, s. 415.

[2] Indian Penal Code,1860, s. 25.

[3] Indian Penal Code, 1860, s. 24.

[4] A. Pareed Pillai v State (1973) SC 326.

[5] Rajesh Bajaj v. NCT of Delhi and Ors. (1999) SC 1216.

[6] S.W. Palanitkar V. State of Bihar 2001(10) TMI 1150.

[7] Indian Penal Code, s. 417.

Here's What Industry Insiders Say About Doctrine Of Indoor Management

Meaning of Doctrine of Indoor Management

The doctrine of Indoor Management also referred to as the Turquand’s Rule evolved 150 years back. This Doctrine came into play as an opposition to the Doctrine of Constructive Notice. On one hand, where Doctrine of Constructive Notice is devised to protect the company against outsiders, the Doctrine of Indoor Management was meant to protect the third party or rather the outsiders from the actions of the company. In other words, Doctrine of Indoor Management states that people dealing with the company need not enquire about the internal proceedings related to the contract if they are satisfied that the transaction follows the memorandum and Articles of Association.

Origin of the Doctrine

This Doctrine of Indoor Management was first recognized in the case of Royal British Bank v Turquand. [1]

Facts of the case: The directors of the Company borrowed a certain sum from the plaintiff. The Article of the Company provided for the borrowing of money on bonds with a condition attached to it which stated that a resolution should be passed in the general meeting.  But the shareholders claimed that such resolution was not passed in the general meeting and thus the company was not liable to pay the money.

The verdict of the Case: It was held that the Company would be liable to pay the amount. The Directors were entitled to borrow the amount only after a resolution was passed in the General Meeting, thus the plaintiff had the right to infer that the formalities were done and the resolution was passed. Turquand was thus entitled to sue the Company on the strength of the bond. Lord Hartherly in his judgment sated- “Outsiders are bound to know the external position of the company, but are not bound to know its indoor management.”

Section 290 of the Companies Act 1956 states that the Acts done by the Director would be valid irrespective of the fact that their appointment was invalid by reason of any defect or got terminated under any of the provisions laid down in the Act.

Establishment of the Doctrine

The Doctrine of Indoor Management as identified in the Turquand Case was not accepted until it was approved by the House of Lords in the case of Mahoney v East Holyford Mining Co.[2]

Facts of the Case: The Article of the Company stated that the cheque must be signed by 2 or 3 directors and the secretary. But the issue regarding this case was that the Director who signed the cheque was not properly appointed at the time of signing.

The verdict of the Court-The Court held that the Appointment of the Director came under the Internal Management of the Company thus even if the director was not properly appointed, the third party was entitled to receive or cash the cheques as he is entitled to presume that the Directors were properly appointed.

Exceptions to Doctrine of Indoor Management:

1.) Where the outsider had knowledge of irregularity– The Application of the doctrine stands repealed in cases where the outsider dealing with the company is aware of the lack of authority of the person acting on behalf of the company.

Case: In the case of Howard v Patent Ivory Co[3]., the Directors of the Company borrowed the sum of 3500 pounds from another director without the consent of the Annual General Meeting. The rule stated that no director was allowed to borrow more than 1000 pounds without the consent of the general meeting. Verdict: Since the plaintiff here was the Director and was well aware of the rules and internal irregularities, the Company would not be liable.

2.)  No knowledge of Memorandum and Articles– This doctrine shall not apply in cases where the plaintiff relies on the Company for not having knowledge of the Memorandum and Articles.

Case: Rama Corporation v Proved Tin & General Investment Co[4]. brought this exception into the limelight. As per the facts of the case, Director X of the company entered into a contract with Rama Corporation. The Articles of the Company stated that the directors may delegate their power but Rama Corporation without reading the Article and Memorandum entered the contract. It was later discovered that the Company did not delegate power to Director X.

Verdict: The Court held that the plaintiff could not take the remedy of Indoor Management for not knowing the Article or Memorandum.

3.) Forgery-The Company cannot be held liable for forgery committed by officers. Thus the Doctrine is not applicable to forged transactions which are void ab initio.

Case: In the case of Rouben v Great Fingal Consolidated,[5] the secretary of the Company forged the signatures of two directors of the Company and issued a certificate without authority.

Verdict: It was thus held that the holder of certificate could not take the remedy of Indoor Management.

4.) Negligence-The doctrine is not applicable in the case where an officer of a company does an act beyond his authority.

Case: In the case of B. Anand Behari v Dinshaw & Co (Bankers )Ltd.[6]., an accountant of the Company transferred the Company in favor of Anand Behari.

Verdict: The Court held that the Doctrine of Indoor Management won’t be applicable as the transfer would be void considering the fact that the transfer made by the accountant was beyond his authority.

5.) The doctrine would also remain inapplicable in cases where the question is with regards to the existence of an agency and not just regarding the power exercised by the agent.

The doctrine of Indoor Management in India:

The Court in the case of Lakshmi Ratan Cotton Mills Co. Ltd v J.K Jute Mills Co. Ltd[7]., declared that in any transaction of loan where the creditor entering into contract is not barred by any charter of the company or its articles and can enter into a contract on behalf of the Company, he/she is entitled to presume that all formalities required in connection have been completed.

[1] (1856) 6 E & B 327

[2]  (1875) LR 7 HL 893

[3] (1888) 38 Ch. D. 156

[4] (1952) 1All. ER 554

[5]  (1906) AC 439

[6]AIR 1942 Oudh 417

[7] AIR 1957 All 311

Ten Little Tricks To Know About Interlocutory Application In India And Its Format

Interlocutory is a legal term which essentially refers to an order, sentence, decree, or judgment, given in an intermediate or transitional stage between the beginning and end of a cause of action, used to give an impermanent or temporary decision on an issue. Along these lines, an interlocutory order isn’t final and isn’t liable to immediate appeal.

What is the interlocutory application

An interlocutory application meaning is an application which is moved in the primary appeal. It is normally documented when you request some urgent relief or to convey certain new facts to the learning of the court. In the event that the supreme court order says ‘interlocutory application disposed of”, it implies that you had documented an application looking for some relief, and in the wake of hearing you on the application, the court has passed an order in your application.

Interlocutory Petition mentioned in the Civil Rules of Practice, Rule 2 (j) states ” application to the court for any suit, appeal or proceedings already instituted in such court, other than a proceeding for execution of a decree or order.” It is fascinating to take note of that “application” is characterized in Rule 2 (c) that incorporates execution application, execution petition, and interlocutory application, both written and oral.

Interlocutory Application Format:-

INTERLOCUTORY APPLICATION

BEFORE THE APPELLATE TRIBUNAL FOR ELECTRICITY

IA NO. ______OF 200

In

Appeal/Original Petition No. ________of 200 .

CAUSE TITLE

Set out the Appeal No. _________________of 200

Appeal / Petition short cause title

Set out the 1. Appeal No.____________200

Cause Title – Interlocutory Application

Petition for stay/direction/dispense with/condone delay/calling records

The applicant above-named state/s as follows :

1. Set out the relief (s)

2. Brief facts

3. The basis on which interim orders prayed for

4. The balance of convenience, if any :

(All interlocutory applications shall be supported by an affidavit sworn by the Applicant/on its behalf and attested by a Notary Public).

DECLARATION

The applicant above named hereby solemnly declare that nothing material has been concealed or suppressed and further declare that the enclosures and typed set of material papers relied upon and filed herewith are true copies of the originals or fair reproduction of the originals or true translation thereof.

Verified at_________dated at _______this day __________of _______200 .

Counsel for Applicant                                                                                                                                                                                                        Applicant

VERIFICATION

I __________________(Name of the applicant) S/o.W/o.D/o. (indicate any one, as the case may be ) ___________age ____________working as __________ in the office of _______________resident of _______________ do hereby verify that the contents of the paras _____________to ___________are true to my personal knowledge / derived from official record ) and para _________ to _______are believed to be true on legal advice and that I have not suppressed any material facts.

Date :

Place :

                                                                                                                                                     Signature of the Appellant/Petitioner or authorized officer

The Code of Civil Procedure with its Rule 3(9) defines an Original Petition as a petition by which procedures are founded in a court other than a suit or appeal or proceeding in the execution of a decree or order.

This elucidates and clarifies the distinction between an original appeal to and an Interlocutory order as

• The original appeal of is identified with the purpose of the start of a dispute while the interlocutory request is recorded within the main appeal.
• The original petition establishes the procedures while the interlocutory petition looks for interim relief.
• Interlocutory petitions can be named as a type of incidental procedures dissimilar to original appeal to and are recorded to support the principle/main petitions.
• Interlocutory petitions look for relief amid the pendency of the main appeal to and can be discarded before the final judgment.

In T.V. Satyanarayana v. Subba Aruna Meenakshi, the question into thought was whether an appeal lies against the order made by the family court on an application exhibited under section 24 of the Hindu Marriage Act allowing interim maintenance under Section 19 of the Family Courts Act? It was held that  Interlocutory Application “means an application to the Court for any suit, appeal or proceeding already instituted in such Court other than an application for execution of the decree or setting aside the decree or last order made in such suit, appeal or proceeding.” An application under Section 24 of the Hindu Marriage Act squarely falls inside the significance of the words “Interlocutory Application,” as it could be made just in the primary proceeding under either provision of the Hindu Marriage Act. Any order passed on such an application would unquestionably be an interlocutory request.

The Supreme Court while thinking about the maintainability of appeals against judgment and interlocutory orders, considered a progression of decisions of various Courts rendered regarding the matter, held that each interlocutory order can’t be viewed as a judgment yet just those orders would be judgments which decide matter in hand or influence indispensable and important rights of the parties and which work on the serious injustice to the party concerned.

An Interlocutory Petition begins with a point of view to shield the finishes of equity from being vanquished when the Original Petition can’t address the prompt conditions. Interlocutory Applications or Interlocutory Petitions are recorded to help the primary appeal for an interlocutory alleviation in the midst of pendency of the main Petition. The purpose of this article is to mostly feature the interlocutory applications and different case laws to imply the statement.

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10 Preparations You Should Make Before Using Condonation Of Delay Under Section 5 Of Limitation Act.

Introduction To Condonation of Delay

The term ‘condonation of delay’ is characterized under Section 5 of the Limitation Act in the event of offers. Condonation of delay is the extension of the prescribed period in specific cases. Section 5 in The Limitation Act, 1963 states “Extension of prescribed period in certain cases. —Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908 (5 of 1908), may be admitted after the prescribed period, if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period. ”

Grounds for Condonation of Delay

Courts require to be persuaded with an adequate reason so as to get the Condonation of delay. A few grounds behind considering (or not considering) for the condonation include:

• Ailment: Including the nature and severity of disease and facts encompassing the failure to act.
• Detainment: Mere detainment is certifiably not an adequate reason. Different reasons ought to satisfy the court
• Other inadequate grounds: Poverty, Parda Nasihn Lady, Minors, Ignorance of the law, negligence (Vigilantibus non-dormant bus Jura subvenient) and so forth.
• Other adequate grounds: Mistake of court, mislead by rulings, the mistake of counsel, the mistake of law, delay in getting copies and so forth.

Application for Condonation of Delay.

Before the Honourable District Court at _______________(enter station)

AS No.(enter appeal suit number and year)

Appellant:(enter name)

Respondent:(enter name) 

AFFIDAVIT

1. I am the appellant in the above appeal and the petitioner in the IA.
2. The above appeal is given against the judgment and decree of ______court in OS No._____(give case number) against the appellant stating to _______(briefly state the order). I know the facts of the case.
3. The appeal ought to have been filed on _______(date). But as I(appellant) was________(enter the sufficient reason) the appeal could not be filed within the said period. Hence a delay of _____days is caused in filing the appeal. The said delay is not due to my wilful default.
4. I have filed a separate petition along with this for condoning the delay of __days in filing the appeal which has to be allowed. Hence it is prayed that this honorable court may be pleased to condone the delay of ___days in filing the appeal by allowing the IA filed herewith for the same unless I will be put to irreparable injuries and loss. All that is stated above are true and correct to the best of my belief.

Dated this the ______(date)

Sd/-Deponent

Mob No:

Email: 

Condonation of delay under section 119 (2) (b) of Income Tax Act

“The Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorize any income-tax authority, not being a Commissioner (Appeals) to admit an application or claim for an exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law.”

Central Board of Direct Taxes (CBDT) has given the powers to income tax authorities to acknowledge the income tax return for a financial year even after the expiry of the due date.

Condonation of Delay Scheme 2018 appeared on 29th December 2018 to give one last chance to the executives of the defaulting organizations who because of the reason of non-filing of financial statements and annual returns were held liable and disqualified. The default with the registrar of the organizations proceeds for a long time.

This scheme refers to the companies registered under the Companies Act,2013.

Important points in respect to Condonation of Delay Scheme 2018

The applicability of the scheme is to organizations which are in default (other than those organizations whose names had been struck off from the registrar of the organizations under Section 248(5) of the Companies Act 2013. In the event that you are the organization whose name is as yet not struck down from the registrar of the organizations at that point:

• The DIN numbers of the executives who were disabled beforehand will be temporarily enabled with the goal that executives could file the documents.

• The organization in default must pay out statutory charges endorsed according to Section 403 of the Companies Act 2013 read with Companies (Registration offices and fees) Rules, 2014 for filling this overdue documents.

• Application expenses for recording the E-form CODS will be Rs. 30,000/ – (nominal for the defaulting directors)

• Those executives whose name isn’t found by the MCA21 registry records yet are associated with the default, they will not have the capacity to reactivate their DIN numbers and would not have the capacity to choose as executives of any organization.

• In the event that the defaulting organizations whose name have been struck down under the provision of Section 248 and 252 of the Companies Act, 2013.

Read Also: Section 185 of the companies act, 2013