IPC Section 421
Section 421 IPC – Dishonest or fraudulent dishonouring of cheques for insufficiency of funds
Core idea:
Section 421 deals with cheating related to dishonoured cheques. It punishes a person who dishonestly issues a cheque knowing that there are insufficient funds in their account or that the account does not exist, intending to cheat or defraud someone.
Essentially, it criminalizes cheque fraud.
🔹 The Law (in essence)
Whoever dishonestly issues a cheque with the knowledge that:
There are insufficient funds in the account, or
The account does not exist,
and intends to cheat the payee or any person, commits an offence under Section 421 IPC.
🔹 Punishment
Imprisonment: Up to 7 years, and
Fine, or
Both.
This section is non-bailable and cognizable, showing the seriousness of cheque fraud.
🔹 Key Elements
To establish an offence under Section 421 IPC, the prosecution must prove:
Cheque issued: The accused issued a cheque for payment.
Dishonest intention: The person knew there were insufficient funds or the account didn’t exist.
Intent to cheat or defraud: The act was deliberate to deceive the payee or obtain property/money.
Cheque dishonoured: The cheque must bounce due to insufficient funds or non-existing account.
🔹 Examples
A issues a cheque of ₹50,000 to B, knowing he has only ₹5,000 in the account, with the intention to cheat. → Guilty under Section 421.
C issues a cheque for ₹1,00,000, account exists, sufficient balance, but cheque bounces due to technical error. → Not guilty, no dishonest intention.
D writes a cheque from a closed account intending to defraud a supplier. → Guilty under Section 421.
🔹 Related Provisions
Section 138 of the Negotiable Instruments Act (NI Act), 1881: Deals with dishonour of cheques for insufficiency of funds (civil and criminal consequences).
Section 420 IPC: Cheating by deception or dishonesty.
Section 421 IPC vs 420 IPC:
421 → Specifically deals with cheques issued dishonestly.
420 → Broader offence of cheating by any kind of deception, including non-cheque methods.
🔹 Quick Recap
Section 421 IPC = Dishonest issuance of cheque with intent to cheat.
Key element: Knowledge of insufficient funds + intent to defraud.
Punishment: Up to 7 years imprisonment + fine.
Purpose: Protect financial transactions and prevent cheque fraud.
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