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SC: Sensitise police, courts on differences between cheating and breach of trust
The judgment was delivered while quashing summons by a court in Uttar Pradesh against the secretary, honorary president, and non-executive director of Delhi Race Club over alleged unpaid dues
New Delhi: The Supreme Court on Friday expressed its dismay over the persistent misunderstanding and misapplication of the law regarding the offences of criminal breach of trust and cheating, underscoring the urgent need to sensitise lower courts and law enforcement agencies across the country to correctly apply these two distinct provisions.
A bench comprising justices JB Pardiwala and Manoj Misra highlighted that even after more than 160 years of the Indian Penal Code’s (IPC) existence, the judiciary and police officers continue to conflate the two offenses, often leading to erroneous prosecutions.
The court observed that it is common practice for police officers to register first information reports (FIR) for both criminal breach of trust and cheating based on mere allegations of dishonesty or fraud.
This mechanical approach, it noted, has led to numerous instances of injustice and has muddied the legal waters. “It is very sad to note that even after these many years, the courts have not been able to understand the fine distinction between criminal breach of trust and cheating,” the bench held.
The judgment was delivered while quashing summons by a court in Uttar Pradesh against the secretary, honorary president, and non-executive director of Delhi Race Club over alleged unpaid dues concerning the sale of horse grains and oats to the club.
In its ruling, the top court emphasised the need for comprehensive training of police officers to ensure that they can correctly distinguish between criminal breach of trust and cheating. The court was unequivocal that both offences are independent and distinct and cannot coexist under the same set of facts. The offenses, it stated, are “antithetical to each other” and must be treated as such by law enforcement and judicial officers alike.
“It is high time that the police officers across the country are imparted proper training in law so as to understand the fine distinction between the offense of cheating vis-à-vis criminal breach of trust,” the bench said.
The court further directed that copies of its judgment be sent to the principal secretaries of the ministry of law & justice and the home department, urging them to take steps to rectify this long-standing issue.
The court also took the opportunity to provide detailed guidance on how to differentiate between criminal breach of trust (previously under Section 406 of the IPC) and cheating (previously under Section 420 of the IPC), now governed by the Bharatiya Nyaya Sanhita (BNS), 2023. The BNS provides for enhanced punishment for the offences of cheating and criminal breach of trust.
While both offences involve dishonest intent, the court highlighted that they are distinct in nature. Criminal breach of trust pertains to a situation where property is legally entrusted to a person, who then dishonestly misappropriates it. Cheating, however, involves a fraudulent inducement from the outset, where a person is deceived into parting with property or consent, it said.
Regretting the “casual approach” of trial courts in cases involving these offences, the bench admonished the magistrates for failing to meticulously examine complaints to determine whether the facts constitute criminal breach of trust or cheating.
The bench emphasised that in cases arising from FIRs, it is the police’s responsibility to ascertain whether the allegations genuinely fall under cheating or criminal breach of trust before proceeding.
In this particular case, the court found that the magistrate had failed to make this crucial distinction and had wrongly taken cognisance of an offence of criminal breach of trust without proper analysis.
The bench stressed that a mere failure to pay for goods sold does not automatically constitute criminal breach of trust, especially when there is no evidence of entrustment, as it quashed the February 2023 summoning order by a Bulandshahr magistrate upon a complaint by a businessman who supplied horse feed, barley, and oats to Delhi Race Club.
