How to Deal with Cheating and Fraud in India: Legal Remedies and Preventive Measures

Introduction

Fraud and cheating are among the most prevalent crimes in India, affecting businesses, consumers, and individuals alike. This guide provides legal remedies, preventive measures, and Supreme Court rulings on dealing with such offenses. Additionally, it includes external links to official resources for further legal action.

Legal Provisions on Cheating and Fraud in India

The Bharatiya Nyaya Sanhita (BNS), 2023, covers various aspects of fraud under the following sections:

1. Cheating (Section 318 of BNS, formerly IPC 415, 417, 418, 420)

• Definition: Deceiving someone to fraudulently induce them to deliver property or alter a document.
• Punishment:
  • General cheating: Up to three years imprisonment and/or fine.
  • Cheating with knowledge of wrongful loss: Up to five years imprisonment and/or fine.
  • Cheating involving delivery of property or alteration of documents: Up to seven years imprisonment and a fine.
• More details: Click Here

2. Fraudulent Misrepresentation (Section 319 of BNS)

• Definition: Intentional misrepresentation made to deceive another person into entering a contract or financial transaction.
• Punishment: Up to five years imprisonment and/or fine.
• More details: Click Here

3. Criminal Breach of Trust (Section 321 of BNS, formerly IPC 406 & 409)

• Definition: When a person entrusted with property dishonestly misappropriates it.
• Punishment:
  • General cases: Up to three years imprisonment and/or fine.
  • Public servants/professionals: Up to ten years imprisonment and fine.

4. Identity Theft and Cyber Fraud (Section 338 of BNS, IT Act, 2000)

• Definition: Identity theft, online financial fraud, and digital deception.
• Punishment:
  • Identity theft (Section 66C, IT Act): Up to three years imprisonment and fine up to ₹1 lakh.
  • Cheating by impersonation online (Section 66D, IT Act): Up to three years imprisonment and fine up to ₹1 lakh.
• Report Cyber Crime: Cyber Crime Portal

5. Organized Crime (Section 111 of BNS)

• Definition: Crimes such as extortion, contract killings, land grabbing, human trafficking, and economic frauds carried out by an organized syndicate.
• Punishment:
  • If the offense results in death: Death penalty or life imprisonment and a fine of at least ₹10 lakh.
  • Other organized crimes: Minimum five years imprisonment (extendable to life) and a fine of at least ₹5 lakh.
• More details: https://www.mha.gov.in/sites/default/files/250883_english_01042024.pdf

Steps to Take If You Are a Victim of Fraud

1. Gather Evidence
   • Collect emails, contracts, transaction records, call recordings, and messages.
2. File a Police Complaint (FIR)
   • Register an FIR under relevant BNS sections or the IT Act.
   • If the police refuse, approach the Superintendent of Police (SP) or file a complaint before the Magistrate under Section 156(3) of CrPC.
   • File FIR Online: State-wise e-FIR Portals
3. Approach the Economic Offenses Wing (EOW)
   • For large financial frauds, file a complaint with EOW.
   • Details about EOW: Click Here
4. Consumer Complaints for Business & Financial Frauds
   • File a case in the Consumer Disputes Redressal Commission under the Consumer Protection Act, 2019.
   • Lodge Consumer Complaint: National Consumer Helpline
5. Cyber Crime Complaints
   • Register complaints on the National Cyber Crime Portal.
   • File a Cyber Complaint: Cyber Crime Portal
6. Consult a Legal Expert
   • B.S. Makar Advocates & Solicitors specialize in fraud-related cases and can help with legal notices, settlements, and litigation.
   • Consult a Lawyer Online: Bar Council of India

Preventive Measures to Avoid Fraud

• Verify Before You Trust: Conduct background checks before financial transactions.
• Use Secure Payment Channels: Prefer banking transactions over cash.
• Read Contracts Thoroughly: Ensure clarity in terms and conditions.
• Strengthen Cybersecurity: Enable two-factor authentication and use strong passwords.
• Report Suspicious Activity: Early reporting prevents larger fraud.

Landmark Supreme Court Judgments on Cheating and Fraud

1. State of Maharashtra v. Mohd. Sajid Husain Mohd. S. Husain, (2008) 1 SCC 213
   • Key Takeaway: The Supreme Court ruled that mens rea (criminal intent) is crucial in proving cheating.
   • Full Judgment: Click Here
2. Iridium India Telecom Ltd v. Motorola Inc, (2011) 1 SCC 74
   • Key Takeaway: Corporate fraud cases can be prosecuted under criminal law.
   • Full Judgment: Click Here
3. Central Bureau of Investigation v. A. Ravishankar Prasad & Ors, (2009) 6 SCC 351
   • Key Takeaway: The Supreme Court emphasized investigative standards for complex financial fraud cases.
   • Full Judgment: Click Here
4. Shri Bhupinder Singh v. Unitech Ltd, (2020) SCC Online SC 32
   • Key Takeaway: Fraudulent business practices fall under consumer protection laws.
   • Full Judgment: Click Here

Conclusion

Fraud and cheating are serious offenses, but timely action and legal remedies are available. Whether dealing with business fraud, cyber fraud, or financial scams, victims can seek justice through law enforcement and legal experts like B.S. Makar Advocates.

If you or someone you know has been a victim of fraud, consult a legal expert immediately. A proactive approach can help recover losses and ensure justice.

For expert legal assistance, reach out to B.S. Makar Advocates and Solicitors in Mohali, Punjab, specializing in fraud, property disputes, and cyber fraud cases.