Breach of contract vs the offence of cheating

In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time to inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. 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, that is the time when the offence is said to have been committed. therefore it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed. [Devendra and OTHERS Vs State of U.P. and ANOTHER – 06/05/2009]

(See also Indian Oil Corporation v. NEPC India Ltd. and OTHERS, AIR 2006 SC 2780 , Veer Prakash Sharma v. Anil Kumar Agarwal and ANOTHER, 2007 CriLJ 3735 , V.Y. Jose (supra) and Ravindra Kumar Madhanlal Goenka and ANOTHER v. Rugmini Ram Raghav Spinners and ANOTHER, 2009 CriLJ 2852 )