Section 418 IPC: Cheating with knowledge that wrongful loss may ensue to person whose interest offender is bound to protect

Indian Penal Code, 1860

Section 418 IPC at a Glance

Section 418 IPC deals with cheating with knowledge that wrongful loss may ensue to person whose interest offender is bound to protect. It is bailable and non-cognizable, triable by any Magistrate; from 1 July 2024 it is replaced by Section 318(3) BNS.

Punishment

Imprisonment of either description for a term which may extend to three years.

Bailable ⓘNon-Cognizable ⓘCompoundable (with court permission) ⓘ🏛️ Any Magistrate ⓘ
BNS Equivalent

Section 318(3) →

Section 418 IPC Bare Act Text

418. Cheating with knowledge that wrongful loss may ensue to person whose interest offender is bound to protect

Whoever cheats with the knowledge that he is likely thereby to cause wrongful loss to a person whose interest in the transaction to which the cheating relates, he was bound, either by law, or by a legal contract, to protect, shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.

Source: Section 418, Indian Penal Code, 1860

Section 418 IPC in Simple Words

Section 418 of the Indian Penal Code (IPC) punishes cheating committed by a person who knows that wrongful loss is likely to ensue to a person whose interest in the transaction he was bound, either by law or by a legal contract, to protect. Whoever commits this offence is punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.

Under the First Schedule to the Code of Criminal Procedure, 1973, the offence is non-cognizable, bailable, and triable by any Magistrate. The offence is compoundable with the permission of the court by the person cheated under Section 320(2) CrPC.

Ingredients of Section 418 IPC

  • The accused committed cheating as defined under Section 415 IPC
  • The accused was bound, either by law or by a legal contract, to protect the interest of a person in the transaction to which the cheating relates
  • The accused had knowledge that his cheating was likely thereby to cause wrongful loss to that person whose interest he was bound to protect

Punishment Under Section 418 IPC

Imprisonment

Imprisonment of either description for a term which may extend to three years.

Fine

The court may impose fine alone, or fine in addition to imprisonment.

Bailable ⓘNon-Cognizable ⓘCompoundable (with court permission) ⓘ🏛️ Any Magistrate ⓘ

Cheating a person whose interest the offender was bound to protect is punished with imprisonment of either description up to three years, or with fine, or with both.

Example of Section 418 IPC

In 2018 in Kochi, Harish appointed Gautam under a written legal contract as his purchasing agent to inspect and procure raw rubber sheets for Harish's footwear factory, obligating Gautam to protect Harish's interest in each purchase. Gautam dishonestly certified rotten, water-damaged rubber sheets as premium grade and deceived Harish into approving payment for the consignment. Gautam cheated with the knowledge that he was likely thereby to cause wrongful loss to Harish, whose interest in the transaction he was bound by a legal contract to protect. Gautam is punishable under Section 418 IPC.

When Section 418 IPC Does Not Apply

  • Neither a statute nor a valid contract placed the accused under an obligation to safeguard the other person's interest in the transaction.
  • The financial detriment arose from a genuine error of judgment rather than any intentional or dishonest deception.
  • The parties dealt with each other as ordinary buyer and seller at arm's length without any protective legal or contractual duty.
  • The accused lacked knowledge that the deception was likely to cause wrongful loss to the person whose interest was protected.

Section 418 IPC in the BNS

Section 418 IPC is now covered under Section 318(3) BNS.

Section 418 IPC corresponds to Section 318(3) BNS. Section 318(3) BNS retains the statutory ingredients of cheating a person whose interest the offender was bound by law or contract to protect, but increases the maximum term of imprisonment from three years under Section 418 IPC to five years under Section 318(3) BNS. The offence remains punishable with fine, or with both.

View detailed comparison (IPC 418 vs BNS 318(3)) →

FAQs on Section 418 IPC

What does Section 418 IPC punish?▼

Section 418 IPC punishes cheating committed by a person who knows that wrongful loss is likely to ensue to someone whose interest in the transaction he was bound, either by law or legal contract, to protect.

What is the punishment under Section 418 IPC?▼

The punishment is imprisonment of either description for a term which may extend to three years, or with fine, or with both.

Is Section 418 IPC bailable and cognizable?▼

Under the First Schedule to the Code of Criminal Procedure, 1973, an offence under Section 418 IPC is non-cognizable and bailable, triable by any Magistrate.

Can an offence under Section 418 IPC be compounded?▼

Yes, an offence under Section 418 IPC is compoundable by the person cheated under Section 320(2) CrPC, but only with the permission of the court.

What source of obligation is required under Section 418 IPC?▼

The obligation to protect the interest of the person in the transaction must arise either by law or by a legal contract; mere moral or informal business expectations do not suffice.

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Disclaimer: This is for informational purposes only. Always consult a qualified advocate for legal advice.

Sources: Bare Act Text, Indian Penal Code, 1860 · Last updated: 16 Oct 2026 ·