Cheating And Criminal Breach Of Trust: Can Both Be Invoked Together?

In a large number of cases before the courts, especially in financial disputes, one instance is seen almost as a routine. The moment there is an allegation of non-payment or misuse of money, both cheating and criminal breach of trust are added in the FIR. Sections 420 and 406 of Indian Penal Code, 1860 (IPC), akin to Sections 318 and 316 of the Bharatiya Nyaya Sanhita, 2023 (BNS), are invoked together without much thought. This raises a simple but important question. Is this legally correct?

At first glance, it may appear that both offences can go together. After all, both encapsulates the element of dishonesty. But when one looks closely at the law laid down by the courts, the position becomes much clearer. The Supreme Court in Delhi Race Club (1940), made a very important observation. It noted that cheating and criminal breach of trust are different in their basic nature and cannot stand together on the same set of facts.^[2] This is because the two offences start from different points. In cheating, the intention to deceive must be there right from the beginning. In criminal breach of trust, the property is given lawfully, and only later it is misused. So, the timing of dishonest intention is what separates the two.

This distinction is not something new. Courts have been noting and reiterating it for a long time. In S.W. Palanitkar v. State of Bihar, the Supreme Court explained the ingredients of both offences in detail and made it clear that they operate in different situations.^[3] If there is no entrustment, breach of trust cannot be made out. If there is no dishonest intention from the start, cheating cannot be made out.

Then why do we see both sections being applied together so often? The answer lies more in procedure than in substance. Section 221 of the Code of Criminal Procedure, 1973 (CrPC) akin to Section 244 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), allows a person to be charged with multiple offences when it is not clear which exact offence is made out. At the stage of investigation or even framing of charge, the facts may not be fully clear. The law therefore permits some flexibility. It allows the prosecution to keep its options open. In fact, the illustration to the said Section 221, CrPC/ Section 244, BNSS itself says that if an act may amount to theft, cheating, or criminal breach of trust, the accused can be charged with all or any of these offences. So legally speaking, at the initial stage, invoking both cheating and breach of trust together is not completely wrong.

But this is where an important line has to be drawn. What is allowed at the beginning does not automatically continue till the end. Once the evidence comes on record, the court has to decide what actually happened. At that stage, the distinction between the two offences becomes crucial. The court cannot say that both cheating and breach of trust have been committed on the same facts, because their basic requirements contradict each other.

Thus, the correct way to understand the law could be inferred as follows. At the stage of FIR or charge, both offences may be mentioned if there is some doubt. But at the stage of conviction, the court has to choose one. Either it was cheating, or it was breach of trust. It cannot be both together.

This issue is not just theoretical. It comes up regularly in practice. In many cases, especially commercial disputes, criminal law is used as a pressure tactic. A simple case of non-payment is turned into a criminal case by adding both sections. The Supreme Court has repeatedly cautioned against this approach. In Hari Prasad Chamaria v. Bishun Kumar Surekha, it was clearly held that mere failure to honour a promise or pay money does not amount to cheating unless dishonest intention is shown from the beginning.^[4] Similarly, in Pepsi Foods Ltd. v. Special Judicial Magistrate, the Court reminded that summoning a person in a criminal case is a serious matter and should not be done mechanically.^[5] These principles are often overlooked when both sections are added without examining whether their ingredients are actually satisfied.

From a practical point of view, this distinction also becomes important in bail matters and quashing petitions. If both offences are casually invoked, it may make the case appear more serious than it actually is. But once the court examines the facts, it may find that neither offence is properly made out.

What is really needed is a more careful approach at the initial stage itself. Investigating officers and judicial authorities need to look at the basic ingredients before adding sections. Simply putting both Sections 420 and 406 of IPC/ Sections 318 and 316 of the BNS together does not make a case stronger. In fact, it may weaken the prosecution if the case does not fit either offence properly.

At the same time, the law does recognise that at an early stage, everything may not be clear. That is why Section 221 exists. But this provision should be used with understanding, not as a routine. In the end, the position is quite simple. The law allows some flexibility at the beginning, but it demands clarity at the end. Cheating and criminal breach of trust may travel together at the initial stage, but when the case is finally decided, only one can remain.

1. Vikash Kumar v. State of Uttar Pradesh, 2026 LiveLaw (AB) 180 at: https://www.livelaw.in/high-court/allahabad-high-court/allahabad-hc-221-crpc-no-bar-cheating-criminal-breach-of-trust-offences-allegations-529119 ↑

2. Delhi Race Club (1940) Ltd.& Anr. v. State of Uttar Pradesh, 2024 LiveLaw (SC) 603, at https://www.livelaw.in/supreme-court/high-time-police-officers-are-given-training-on-distinction-between-cheating-criminal-breach-of-trust-supreme-court-267571 ↑

3. S.W. Palanitkar v. State of Bihar, AIR 2001 SC 2960 ↑

4. Hari Prasad Chamaria v. Bishun Kumar Surekha, AIR 1974 SC 301 ↑

5. Pepsi Foods Ltd. v. Special Judicial Magistrate, AIR 1998 SC 128