A loan-recovery dispute without dishonest intent at inception does not constitute cheating under Section 318 BNS.

Respondent No. 2 complained that, after his father’s death, the petitioner—then a bank manager—obtained two signed blank papers in connection with an outstanding loan and a proposed auction of the secured property.

He alleged that one paper was used to prepare a receipt and that ₹9,650 was transferred from his wife’s pygmy account to the loan account without her consent.

An FIR was registered against the petitioner under Section 318 of the Bharatiya Nyaya Sanhita, 2023 (“BNS”).

The petitioner sought to quash the FIR under Section 482 CrPC/Section 528 BNSS, contending that the events arose from ordinary loan-recovery transactions and did not disclose cheating.

Further proceedings had been stayed by an earlier order.

1. Whether the allegations and material on record disclosed the essential ingredients of cheating under Section 318 BNS so as to justify continuation of the FIR against the petitioner.

2. Whether the absence of the alleged blank papers precluded quashing the FIR, having regard to the decision in Antonetto J. D’Souza v. Aldila Braganza.

Section 318 BNS requires deception and fraudulent or dishonest inducement, accompanied by the requisite dishonest intention; the Court stated that such intention must exist at the inception of the transaction or representation.

The Court also considered the inherent jurisdiction to quash criminal proceedings under Section 482 CrPC/Section 528 BNSS.

In Antonetto J. D’Souza v. Aldila Braganza, as quoted in the judgment, the absence of an original document alleged to be forged is not, by itself, fatal to a prosecution if the charge may be proved by other evidence, including circumstantial evidence; whether such evidence suffices depends on the case.

The Court viewed the payments and proposed auction in the context of an existing loan default and the bank’s recovery efforts.

It found that neither alleged blank paper was produced and that the material did not establish that the receipt was prepared on the paper allegedly signed by Respondent No. 2.

The amounts were said to have been credited towards the loan, and there was no allegation that the petitioner personally benefited.

On those facts, the Court held that the allegations did not establish deception, dishonest inducement, or the requisite dishonest intention; any irregularity in obtaining or using the papers, without more, did not make out cheating.

It distinguished Antonetto J. D’Souza because that decision concerned forgery and Section 471 IPC, whereas the present charge was cheating under Section 318 BNS.

The criminal petition was allowed, and the FIR in Crime No. 36/2025 against the petitioner was quashed.