Section 423 IPC: Dishonest or fraudulent execution of deed of transfer containing false statement of consideration
Indian Penal Code, 1860
Section 423 IPC at a Glance
Section 423 IPC deals with dishonest or fraudulent execution of deed of transfer containing false statement of consideration. It is bailable and non-cognizable, triable by any Magistrate; from 1 July 2024 it is replaced by Section 322 BNS.
Imprisonment of either description for a term which may extend to two years.
Section 423 IPC Bare Act Text
423. Dishonest or fraudulent execution of deed of transfer containing false statement of consideration
Whoever dishonestly or fraudulently signs, executes or becomes a party to any deed or instrument which purports to transfer or subject to any charge any property, or any interest therein, and which contains any false statement relating to the consideration for such transfer or charge, or relating to the person or persons for whose use or benefit it is really intended to operate, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both.
Source: Section 423, Indian Penal Code, 1860
Section 423 IPC in Simple Words
Section 423 of the Indian Penal Code (IPC) punishes dishonest or fraudulent execution of a deed of transfer containing a false statement of consideration or an untrue recital regarding the real beneficiary. Whoever dishonestly or fraudulently signs, executes, or becomes a party to any deed or instrument purporting to transfer or charge property containing such untruthful recitals is punished with imprisonment of either description for a term extending up to two 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 without the permission of the court by the person affected thereby under Section 320(1) CrPC.
Ingredients of Section 423 IPC
- The accused signed, executed, or became a party to a deed or instrument
- The deed or instrument purported to transfer or subject to any charge any property or any interest therein
- The document contained a false statement of consideration for such transfer or charge, or an untrue recital regarding the person for whose use or benefit it was really intended to operate
- The accused acted dishonestly or fraudulently in signing, executing, or becoming a party to that deed or instrument
Punishment Under Section 423 IPC
Imprisonment of either description for a term which may extend to two years.
The court may impose fine alone, or fine in addition to imprisonment.
Dishonest or fraudulent execution of a transfer deed containing a false statement of consideration carries imprisonment of either description up to two years, or fine, or both.
Example of Section 423 IPC
When Section 423 IPC Does Not Apply
- The executed instrument truthfully recorded both the real consideration and the actual person for whose benefit the transfer or charge was made.
- The arrangement remained a purely verbal agreement and nobody signed, executed, or became a party to any written deed or instrument.
- An inaccurate figure in the document resulted from a clerical mistake rather than any dishonest or fraudulent purpose.
- A party signed the transfer document in good faith while believing that all statements regarding consideration and beneficiaries were true.
Section 423 IPC in the BNS
Section 423 IPC is now covered under Section 322 BNS.
Section 423 IPC corresponds to Section 322 BNS. Section 322 BNS reproduces the definition and ingredients of Section 423 IPC regarding execution of transfer instruments containing a false statement of consideration or an untrue recital of beneficiary, but increases the maximum imprisonment from two years under Section 423 IPC to three years under Section 322 BNS. The offence remains punishable with fine, or with both.
View detailed comparison (IPC 423 vs BNS 322) →FAQs on Section 423 IPC
What does Section 423 IPC punish?▼
Section 423 IPC punishes dishonestly or fraudulently signing, executing, or becoming a party to any deed or instrument containing a false statement of consideration or an untrue beneficiary recital.
What is the punishment prescribed under Section 423 IPC?▼
The punishment is imprisonment of either description for a term which may extend to two years, or with fine, or with both.
Is Section 423 IPC bailable and cognizable?▼
Under the First Schedule to the Code of Criminal Procedure, 1973, an offence under Section 423 IPC is non-cognizable and bailable, triable by any Magistrate.
Can an offence under Section 423 IPC be compounded?▼
Under Section 320(1) CrPC, compounding can be done by the person affected thereby without needing permission from the court.
Does Section 423 IPC apply if the stated price is accurate but the beneficiary is misrepresented?▼
Yes, Section 423 IPC applies alternatively if the document contains an untrue recital relating to the person for whose use or benefit the transfer is really intended to operate, even if consideration is correctly stated.
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Sources: Bare Act Text, Indian Penal Code, 1860 · Last updated: 16 Oct 2026 ·