Dishonest inducement leading to wrongful gain constitutes cheating under Section 420, IPC.

( 1 ) THIS appeal is directed against the judgment of Shri P. L. Singla, 8th Additional Sessions Judge, Delhi convicting the appellants under Section 420, IPC. They have been sentenced to rigorous imprisonment for one year and a fine of rupees fifteen thousand, in default rigorous imprisonment for six months.

( 2 ) BRIEFLY stated, the prosecution case is that the appellants are the sons of the accused Jagan Nath Sharma (since dead ). The appellants were partners of M/s. J. N. Sharma and Sons. The said partnership firm used to manufacture engineering goods including galvanised telephone poles, etc. In 1964, the Directorate General of Supplies and Disposals, Government of India invited tenders for supply of 70,000 galvanised steel tubes rivetted (seam) tapered D-8 . The tender submitted by the said firm was accepted and the supply order A. T. No. SHM. 4/7289-N and 7391-N/ 1/64/jn/1614 dated 2. 3. 1964 was placed on the firm for supply of stores valued at Rs. 39,27,000. 00 @ Rs. 56. 10 per galvanised steel tube rivetted (seam) tapered D-8 . As per terms of the contract the accused firm was entitled to receive 95% payment on proof of despatch and balance 5% on receipt of stores by the consignee in good condition and accepted by him. On 14. 2. 1968, Shri R. C. Ghai, Deputy Director General (Administration), Ministry of Works and Housing, Government of India addressed a complaint to Shri P. V. Hingorani, DIG/cbi/spe/ (G. W. II), New Delhi alleging therein that the accused firm had supplied less quantity of stores to the consignees but had obtained 95% payment in respect of quantity in excess of the one actually supplied by quoting fictitious railway receipts in the bills and thereby cheated the Government to the tune of Rs. 6,76,803. 00. Investigation pursuant thereto culminated in submission of a charge-sheet under Sections 120-B/420, IPC against the accused persons.

( 3 ) THE appellants abjured their guilt and alleged that their father (deceased J. N. Sharma) was directly in charge of the affairs of the accused firm. They had not adduced any evidence in support of their defence. The learned Additional Sessions Judge, on an assessment of the evidence adduced by the prosecution found the appellants guilty under Section 420, Indian Penal Code and convicted and sentenced them as indicated above.

( 4 ) IT is relevant to mention that the accused J. N. Sharma died during the trial. The question is: whether the appellants are guilty under Section 420, IPC. For a person to be convicted under Section 420, Indian Penal Code it has to be established not only that he has cheated someone but also that by doing so he has dishonestly induced the person who was cheated to deliver any property, etc. A person can be said to have done a thing dishonestly if he does so with the intention of causing wrongful gain to one person or wrongful loss to another person. Wrongful loss is the loss by unlawful means of property to which a person is entitled while wrongful gain to a person means a gain to him by unlawful means of property to which the person gaming is not legally entitled. There are two facets of the definition of dishonesty and it is enough to establish the existence of one of them. The law does not require that both should be established. (Tulsi Ram v. State of U. P. , AIR 1963 SC 666 ).

( 5 ) IT is a common ground that the firm M/s. J. N. Sharma and Sons was a partnership firm of which the appellants were also partners. The said firm used to manufacture engineering goods including galvanised steel tubes, etc. Pursuant to the notice inviting tenders issued by the Directorate General of Supplies and Disposals, Government of India for supply of steel tubes, rivetted (seam) tapered D-8 the accused firm submitted its tender, which was accepted. Consequently, the supply order A. T. No. SHM-4/7289-N and 7391-N/1/64/jn/1614 dated 2. 3. 1964 was placed on the said firm for supply of 70,000 galvanised steel tubes rivetted (seam) tapered