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Subsequent Purchaser as Accused in Cheating Cases - Main Points and Insights
Legal Possibility of Making Subsequent Purchaser an Accused: Courts have recognized that a subsequent purchaser can be made an accused in a cheating case if there is evidence of dishonest or fraudulent intent from the outset. However, mere possession or subsequent conduct alone is insufficient; the intention at the time of transaction is critical. For example, ["Smt. Mohammad Karishma @ Nagandla Keerthana vs The State of Telangana - Telangana"] states, No specific averments have been made to substantiate the offence of cheating... against the petitioner, and emphasizes the absence of clear allegations or evidence of criminal intent, especially since the petitioner was a subsequent purchaser and was a minor at the time of the alleged sale. The court observed that criminal proceedings against such a person might amount to abuse of process if no criminal intent is proven.
Requirement of Dishonest Intention at the Time of Inducement: Multiple judgments highlight that for a person to be accused of cheating under Section 420 IPC, there must be proof that the accused had dishonest or fraudulent intent from the inception of the transaction. ["Mohammad Irasad vs State of U.P. - Allahabad"] notes, no case of cheating punishable under Section 420 IPC appears to be made out against the applicant where the complaint was not by the purchaser, and no dishonest intention was established. Similarly, ["Vivek Agarwalla VS State of Jharkhand - Jharkhand"] and ["Aitha Narasimham and another VS Duvvuru Adisesha Reddy and another - Madras"] emphasize that the intention of the accused at the time of inducement should be looked into, and the representation was false with prior knowledge, which are essential elements.
Role of Subsequent Conduct: While subsequent conduct can be relevant, it is not the sole criterion for establishing dishonest intent. The courts have clarified that the intention must be present from the beginning. ["Aitha Narasimham VS Duvvuru Adisesha Reddy - Andhra Pradesh"] states, deception is the essence of an offence of cheating and if there is no proof of dishonest intention on the part of the accused at the time when he made the promise... there can be no offence of cheating. The subsequent failure to perform may support the case but cannot alone prove dishonesty at the outset.
Case Law and Judicial Viewpoints: The Supreme Court and High Courts have consistently held that for a cheating offence, the accused's fraudulent intent must be established at the time of making the promise or inducement. ["Vijayan, S/o. Madhavan VS State Of Kerala - Kerala"] and ["Abhay Kumar @ Abhay Kumar Singh VS State of Jharkhand - Jharkhand"] note that fraudulent or dishonest intention of the accused should be at the time of making the promise, and mere breach later does not constitute cheating unless dishonesty is proven from inception.
Analysis and Conclusion: Making a subsequent purchaser an accused in a cheating case is legally permissible if there is clear evidence that dishonest or fraudulent intent existed from the beginning of the transaction. Courts require proof that the accused had the guilty mind (mens rea) at the time of inducement, not merely based on subsequent conduct or breach. When allegations lack such proof, proceedings against subsequent purchasers are often deemed abuse of process or are quashed. Therefore, the key factor is establishing the initial fraudulent intent, not just the subsequent conduct.
References:["Smt. Mohammad Karishma @ Nagandla Keerthana vs The State of Telangana - Telangana"]["Mohammad Irasad vs State of U.P. - Allahabad"]["Vivek Agarwalla VS State of Jharkhand - Jharkhand"]["Aitha Narasimham and another VS Duvvuru Adisesha Reddy and another - Madras"]["Aitha Narasimham VS Duvvuru Adisesha Reddy - Andhra Pradesh"]["Vijayan, S/o. Madhavan VS State Of Kerala - Kerala"]["Abhay Kumar @ Abhay Kumar Singh VS State of Jharkhand - Jharkhand"]
Imagine purchasing a property in good faith, only to find yourself named as a co-accused in a cheating case filed by a third party. This scenario raises a critical question: Can a subsequent purchaser be made an accused in a cheating case? In the realm of Indian law, particularly under Section 420 of the Indian Penal Code (IPC), the answer hinges on proof of fraudulent intent at the time of the transaction. This blog post delves into judicial precedents, key legal principles, and practical insights to clarify this complex issue.
While this article provides general information based on court judgments, it is not a substitute for professional legal advice. Consult a qualified lawyer for your specific situation.
Cheating, as defined under Section 415 IPC and punishable under Section 420, requires deception with a dishonest or fraudulent intention that induces someone to deliver property or causes wrongful loss. Courts consistently emphasize that the fraudulent or dishonest intention must exist at the inception of the transactionPushpa Omprakash Mantri vs State of Maharashtra, Through Police Station Officer, Police Station Gadge Nagar, Amravati City - 2025 Supreme(Online)(Bom) 4221. Mere breach of contract or subsequent disputes do not suffice without this initial intent Shaukat Mohammad Rahman, son of late Aziaur Mohammad Rahman vs State of Goa, Through Police Inspector & Police Station Incharge, Porvorim Police Station - 2025 Supreme(Bom) 742.
For instance, Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction Pushpa Omprakash Mantri vs State of Maharashtra, Through Police Station Officer, Police Station Gadge Nagar, Amravati City - 2025 Supreme(Online)(Bom) 4221. This principle protects innocent parties from criminal liability in what are often civil matters.
Judicial rulings underscore that intent at the time of inducement is paramount. It depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test Motorola Incorporated VS Union of India & others - 2003 0 Supreme(Bom) 890V. D. Raveesha VS State Of Karnataka - 2024 Supreme(SC) 1376. Subsequent actions can provide evidence, but they alone cannot establish cheating.
The Supreme Court has reiterated: Guilty intent at the time of making promise is a requirement and an essential ingredient Hridaya Ranjan Pd. Verma VS State Of Bihar - 2000 3 Supreme 13. Without this, allegations fail to meet the threshold for Sections 417, 418, 419, or 420 IPC Anant Pandurang Kale VS Union of India, Through Secretary Home Ministry, of Home Affairs, New Delhi - 2018 0 Supreme(Bom) 1627.
In one case involving a lease agreement, the court dismissed discharge applications because material showed dishonest intent from the start, where the accused concealed facts about property title Deepak S/o Ramdeo Jaiswal VS State of Maharashtra - 2023 Supreme(Bom) 667. Conversely, unilateral cancellation of a Power of Attorney post-agreement did not constitute cheating absent initial deception C. V. Thambidurai VS A. Natarajan - 2023 Supreme(Mad) 3163.
Subsequent purchasers—those buying property after an initial fraudulent sale—are typically not liable unless they actively participated in or knew of the fraud at purchase. Courts have quashed proceedings against bona fide buyers lacking dishonest intent.
Key observations include: The complaint is not by the purchaser. On the other hand, the purchaser is made a co-accused Anant Pandurang Kale VS Union of India, Through Secretary Home Ministry, of Home Affairs, New Delhi - 2018 0 Supreme(Bom) 1627Parmanand Adwani S/o Shri Bhikam Chand vs State Of Rajasthan - 2025 Supreme(Raj) 1686Krishna Yadav VS State of Bihar - 2022 Supreme(Pat) 539. In Md. Ibrahim v. State of Bihar, the Supreme Court held that third-party purchasers cannot be implicated without proof of deception towards the complainant RANDHEER SINGH VS STATE OF U. P. - 2021 0 Supreme(SC) 664.
Further, In the absence of any allegation that the subsequent purchaser was involved in or aware of the fraud at the time of purchase, they cannot be made liable for cheating Medchl Chemicals And Pharma Private LTD. VS Biological E. LTD. - 2000 2 Supreme 261. A petitioner who bought property via registered sale deed as a bona fide purchaser had charges under Section 420 quashed due to no fraudulent intent Palvai Sujatha vs The State of Telangana - 2025 Supreme(Online)(Tel) 54247Palvai Sujatha vs State of Telangana - 2025 Supreme(Telangana) 319.
Another ruling clarified: prima facie, it appears that the petitioner-accused No.4 is a bona fide purchaser of the said property and there is no dishonest or fraudulent intention Palvai Sujatha vs State of Telangana - 2025 Supreme(Telangana) 319. These cases highlight that civil disputes over title or payment cannot be criminalized without meeting cheating's ingredients Raju vs State Of Madhya Pradesh - 2025 Supreme(MP) 526.
Exceptions exist if subsequent purchasers collude or abet the fraud:- Active participation, like colluding in forged sale deeds, could implicate them S. M. Noor Mohamed VS State Rep. by the Inspector of Police, Ramanathapuram - 2017 Supreme(Mad) 4030.- Knowledge and facilitation of deception at purchase time may lead to liability Vasantkumar S/o Hiralal Khandelwal VS State of Maharashtra - 2022 0 Supreme(Bom) 609.- Forgery cases, such as selling hypothecated vehicles without loan repayment, upheld convictions where intent was proven from the start V. D. Raveesha VS State Of Karnataka - 2024 Supreme(SC) 1376.
However, Mere knowledge of the fraud without active participation generally does not suffice Vasantkumar S/o Hiralal Khandelwal VS State of Maharashtra - 2022 0 Supreme(Bom) 609. Courts scrutinize facts rigorously.
For property buyers:- Conduct thorough due diligence: Verify titles, encumbrances, and seller credentials.- Insist on registered deeds and obtain encumbrance certificates.- Claim bona fide purchaser status if unaware of prior fraud.
For complainants:- Prove the subsequent purchaser's knowledge or role in initial deception.- Avoid converting civil suits (e.g., specific performance) into criminal cases Velsamy VS Jothi Vayola Rani - 2018 Supreme(Mad) 1511.
Legal practitioners should gather evidence of intent at inception Raju Krishna Shedbalkar VS State of Karnataka - 2024 0 Supreme(SC) 883. Courts warn against abuse of process, quashing baseless FIRs ABID HUSSAIN s/o ABDUL GANI VS STATE OF M. P. - 2018 Supreme(MP) 1010.
In summary, a subsequent purchaser can only be accused in a cheating case with clear evidence of involvement or knowledge of fraud at purchase. Mere buying post-initial transaction does not trigger liability under IPC cheating provisions. As courts emphasize, the offence of cheating is committed only if the fraudulent or dishonest intention is present at the inception of the transaction Pushpa Omprakash Mantri vs State of Maharashtra, Through Police Station Officer, Police Station Gadge Nagar, Amravati City - 2025 Supreme(Online)(Bom) 4221.
Stay informed, perform due diligence, and consult legal experts to navigate property transactions safely. This evolving area underscores the balance between protecting victims and preventing misuse of criminal law.
#CheatingCase #IPC420 #PropertyLaw
No specific averments have been made to substantiate the offence of cheating as defined under relevant provisions of law against the petitioner. ... As the petitioner is only a subsequent purchaser, and in the absence of clear allegations and supporting evidence of cheating or criminal intent attributable to her, continuation of criminal proceedings against the petitioner would amount to an abuse of the process of law, and the same are liable to ... Moreover, according to the de-facto complainant, the p....
But in this case the complaint is not by the purchaser. On the other hand, the purchaser is made a co-accused. ... In view of the above discussion and the legal position emanating from the judgments of the Hon'ble Supreme Court cited above, no case of cheating punishable under Section 420 IPC appears to be made out against the applicant. ... Even in a case where allegations are made in regard to failure on the part....
the present case and thus, no offence under Section 415 I.P.C. was made out. ... under Section 420 I.P.C. is made out as against the accused. ... the intention to cheat the purchaser. ... The aforesaid facts would establish that the accused did have an intention to cause wrongful loss to the complainant and the subsequent conduct of the accused clearly confirms the intention of the accused to cheat and therefore, the ingredients for....
But in this case the complaint is not by the purchaser. On the other hand, the purchaser is made a co-accused. ... Let us now examine whether the ingredients of an offence of cheating are made out. ... Therefore, it cannot be said that the first accused by the act of executing sale deeds in favour of the second accused or the second accused by reason of being the purchaser, or the third, fourth an....
to 5 as the purchaser, witness, scribe and stamp vendor, colluded with the first accused in execution and registration of the said sale deeds) would bring the case under the first category. ... It depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. ... In order to bring a case for the offence of cheating, it is not merely sufficient to ....
In case of cheating, the intention of the accused at the time of inducement should be looked into which may be judged by a subsequent conduct, but for this, the subsequent conduct is not the sole test. ... The accused has not denied availment of the loan from the Company and the subsequent sale of the vehicle made in favour of Savithramma. However, he has taken the specific defence that he had cleared the loan and closed the account. ... To put it in....
the application made by the applicant-accused for his discharge in Regular Criminal Case No. 11 of 2016. ... Learned Senior Advocate for the accused submitted that the facts and evidence, if considered at its face value, would show that the offence of cheating punishable under Section 420 of the IPC has not been made out against the accused. ... It is seen that this case is not as simple as sought to be made out. In this c....
the offence under Section 420 of IPC are not made out against the petitioner-accused No.4. ... Further, it is the case of the petitioner-accused No.4 is that she purchased the above said property under a registered sale deed dated 12.12.2019 as a bonafide purchaser. 09. ... Cheating. ... Therefore, primafaice, it appears that the petitioner-accused No.4 is a bonafide purchaser of the said property and there is no dishonest or fraudulent intention on ....
Further, it is the case of the petitioner-accused No.4 is that she purchased the above said property under a registered sale deed dated 12.12.2019 as a bonafide purchaser. 09. ... the offence under Section 420 of IPC are not made out against the petitioner-accused No.4. ... Cheating. ... Therefore, primafacie, it appears that the petitioner-accused No.4 is a bonafide purchaser of the said property and there is no dishonest or fraudulent intention on ....
The learned Judge said: "It was clearly, therefore, the duty of the accused to have disclosed the existence of this mortgage to the intending purchaser. He did not do so. ... Held, that the accused was not, in the circumstances of this case, guilty of cheating. THE facts appear from the judgment. Bawa, K.C, and J. S. Jayawardene, for accused, appellant. Obeyesekere, C.C., for the Crown. ... One was an unreported case, in which Schneider A.J. upheld the con....
On the other hand, the purchaser is made a co-accused. But in this case, the complaint is not by the purchaser.
However, in the present case, the third defendant miserably failed to prove that he is a bona-fide purchaser for a valuable consideration without notice. In fact, the third defendant admitted in para-5 of the written statement that he came to know that the plaintiff was not ready and willing to get the sale-deed which led to the cancellation of the agreement of sale, Ex.A-1 dated 01.08.2006 by the first defendant. In any event, the third defendant cannot be brought within the fold of subsequent purchaser, if at all, it is the second defendant, who can be termed as second purchaser.....
On the other hand, the purchaser is made a co-accused. It is not the case of the complainant that any of the accused tried to deceive him either by making a false or misleading representation or by any other action or omission, nor is it his case that they offered him any fraudulent or dishonest inducement to deliver any property or to consent to the retention thereof by any person or to intentionally induce him to do or omit to do anything which he would not do or omit if he were not so deceived. But in this case the complaint is not by the purchaser.
This judgment of the Hon'ble Supreme Court was also followed by the Hon'ble Supreme Court in the case of Azhar Sultana v. B. Rajamani and others reported in 2009-3-L.W. 911. In Ram Awadh (Dead) by L.Rs and others v. Achchaibar Dubey and another reported in 2000 (2) SCC 428, the Hon'ble Supreme Court has held that the subsequent purchaser can also raise a contention that the plaintiff was not ready and willing to perform his part of the contract in a suit for specific performance. As far as the question whether the subsequent purchaser can take any defence apart from the claim as a ....
It is not the case of the complainant that any of the accused tried to deceive him either by making a false or misleading representation or by any other action or omission, nor is it his case that they offered him any fraudulent or dishonest inducement to deliver any property or to consent to the retention thereof by any person or to intentionally induce him to do or omit to do anything which he would not do or omit if he were not so deceived. But in this case the complaint is not by the purchaser. On the other hand, the purchaser is made a co-accused.
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