iminal Appeal No 213 of 1960
Appeal by special leave from the judgment and order dated March 24 1960 of the Punjab High Court Circuit BenchDelhi in Criminal Appeal Case No 41 D of 1958
H L Anand and K Baldev Mehta for the appellant
V D Mahajan and P D Menon for the respondent
November 29
The Judgment of the Court was delivered by 587 SUBBA RAO J
This appeal by Special leave raises the question as to the true meaning of the expression fraudulently  in section 464 of the Indian Penal Code
The facts either admitted or found by the courts below may be briefly stated
The appellant is the wife of Siri Chand Kaviraj
On january 20 1953 she purchased an Austin 10 Horse Power Car with the registration No DLA
4796 from Dewan Ram Swarup in the name of her minor daughter Nalini aged about six months at that time
The price for the car was paid by Dr Vimla
The transfer of the car was notified in the name of Nalini to the Motor Registration Authority
The car at that time was insured against a policy issued by the Bharat Fire  General Insurance Co Ltd and the policy was due to expire sometime in April 1953
On a request made by Dewan Ram Swarup the said policy was transferred in the name of Nalini
In that connection Dr Vimla visited the Insurance Company s Office and signed the proposal form as Nalini
Subsequently she also filed two claims on the ground that the car met with accidents
In connection with these claims she signed the claim forms as Nalini and also the receipts acknowledging the payments of the compensation money as Nalini
On a complaint made by the company alleging fraud on the part of Dr Vimla and her husband the police made investigation and prosecuted Dr Vimla and her husband Siri Chand Kaviraj in the Court of Magistrate 1st Class Delhi
The Magistrate committed Dr Vimla and her husband to Sessions to take their trial under sections 120 B 419 467 and 468 of the Indian Penal Code
The learned Sessions judge held that no case had been made out against the accused under any one of those sections and on that finding acquitted both of them
The State preferred an appeal to the High Court of Punjab and the appeal was disposed of by a Division Bench of that court comprising Falshaw 588 and ChopraJJ
The learned judges confirmed the acquittal of Siri Chand but in regard to Dr
Vimla they confirmed her acquittal under section 419 of the Indian Penal Code but set aside her acquittal under sections 467 and 468 of the Code and instead convicted her under the said sections and sentenced her to imprisonment till the rising of the court and to the payment of a fine of Rs 100 or in default to under  go simple imprisonment for two weeks
Dr Vimla has preferred the present appeal by special leave against her conviction and sentence
The facts found may be briefly summarised thus  Dr Vimla purchased a motor car with her own money in the name of her minor daughter had the insurance policy transferred in the name of her minor daughter by signing her name and she also received compensation for the claims made by her in regard to the two accidents to the car
The claims were true claims and she received the moneys by signing in he claim forms and also in the receipts as Nalini
That is to say Dr Vim a in fact and in substance put through her transactions in connection with the said motor car in the name of her minor daughter
Nalini was in fact either a benamidar for Dr Vimla or her name was used for luck or other sentimental considerations
On the facts found neither Dr Vimla got any advantage either pecuniary or otherwise by signing the name of Nalini in any of the said documents nor the Insurance Company incurred any loss pecuniary or otherwise by dealing with Dr Vimla in the name of Nalini
The Insurance Company would not have acted differently even if the car stood in the name of Dr Vimla and she made the claims and received the amounts from the insurance company in her name
On the said facts the question that arises in this case is whether Dr vimla was guilty of offences under sections 463 and 464 of the Indian Penal Code
589 Learned Counsel for the appellant contends that on the facts found the appellant would not be guilty of forgery as she did not fraudulently sign the requisite forms and the receipts in the name of Nalini as
by so signing she did not intend to cause injury to the insurance company
In other words the contention was that a person does not act fraudulently within the meaning of section 464 unless he is not only guilty of deceit but also he intends to cause injury to the person or persons deceived and as in the present case the appellant had never had the intention to cause injury to the insurance company and as on the facts found no injury had been caused at all to the company the appellant could not be found guilty under the said sections
Before we consider the decisions cited at the Bar it would be convenient to look at the relevant provisions of the Indian Penal Code
Section 463  Whoever makes any false document or part of a document with intent to cause damage or injury to the public or to any person or to support any claim or title or to cause any person to part with property or to enter into any express or implied contract or with intent to commit fraud or that fraud may be committed commits forgery
Section 464  A person is said to make a false document First Which dishonestly or fraudulently makes signs seals or executes a document or part of a document or makes any mark denoting the execution of a document with the intention of causing it to be believed that such documentor part of a document was made signed sealed or executed by or by the authority of a person by whom or by whose authority he knows that it was not made signed sealed or executed or at a time 590 at which he knows that it was not made signed scaled or executed or The definition of false document is a part of the definition of forgery
Both must be read together
If so read the ingredients of the offence of forgery relevant to the present enquiry are as follows  1 fraudulently signing a document or a part of a document with an intention of causing it to be believed that such document or part of a document was signed by another or under his authority  2 making of such a document with an intention to commit fraud or that fraud may be committed
In the two definitions both mens rea described in s464 i e fradulently and the intention to commit fraud in section 463 have the same meaning
This redundancy has perhaps become necessary as the element of fraud is not the ingredient of other in tentions mentioned in section 463
The idea of deceit is a necessary ingredient of fraud but it does not exhaust it an additional element is implicit in the expression
The scope of that something more is the subject of may decisions
We shall consider that question at a later stage in the light of the decisions bearing on the subject
The second thing to be noticed is that in section 464 two adverbs dishonestly and fraudulently are used alternatively indicating thereby that one excludes the other
That means they are not tautological and must be given different meanings
Section 24 of the Penal Code defines dishonestly thus  Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person is said to do that thing dishonestly
Fraudulently is defined in section 25 thus  A perosn is said to do a thing fraudulently if he does that thing with intent to 591 defrand but not otherwise
The word defraud includes an element of deceit
Deceit is not an ingredient of the definition of the word dishonestly while it is an important ingredient of the definition of the word fraudulently
The former involves a pecuniary or economic gain or loss while the latter by construction excludes that element
Further the juxtaposition of the two expressions  dishonestly and fraudulently used in the various sections of the Code indicates their close affinity and therefore the definition of one may give colour to the other
To illustrate in the definition of dishonestly wrongful gain or wrongful loss is the necessary enough
So too if the expresssion fraudulently  were to be held to involve the element of injury to the person or persons deceived it would be reasonable to assume that the injury should be something other than pecuniary or economic loss
Though almost always an advantage to one causes loss to another and vice versa it need not necessarily be so
Should we hold that the concept of fraud would include not only deceit but also some injury to the person deceived it would be appropriate to hold by analogy drawn from the definition of dishonestly that to satisfy the definition of  fraudulently it would be enough if there was a non economic advantage to the deceiver or a non economic loss to the deceived
Both need not co exist
Let us now consider some of the leading text book writers and decisions to ascertain the meaning of the word fraudulently
The classic definition of the word fraudulently is found in Steplien s History of the Criminal law of England Vol 2 at p 121 and it reads I shall not attempt to construct a definition which will meet every case which might 592 be suggested but there is little danger in saving that whenever the words fraud or intent to defraud or fraudulently occur in the definition of a crime two elements at least are essential to the commission of the crime  namely first deceit or an intention to deceive or in some cases mere secrecy  and secondly either actual injury or possible injury or to a risk of possible injury by means of that deceit or secrecy  
This intent is very seldom the only or the principal intention entertained by the fraudulent person whose principal object in nearly every case is his own advantage   
A practically conclusive test of the fraudulent character of a deception for criminal purposes is this  Did the author of the deceit derive any advantage from it which could not have been had if the truth had been known  If so it is hardly possible that the advantage should not have had an equivalent in loss or risk of loss to someone else and if so there was fraud
 It would be seen from this passage that  fraud is made up of two ingredients deceit and injury
The learned author also realizes that the principal object of every fraudulent person in nearly every case is to derive some advantage though such advantage has a corresponding loss or risk of loss to another
Though the author has not visualized the extremely rare situation of an advantage secured by one without a corresponding loss to another this idea is persued in later decisions
As regards the nature of this injury in Kenny s Outline of Criminal Law 15th Edn at p 333 it is stated that pecuniary detriment is unnecessary
In Haycraft vs Creasy 1 LeBlanc observed 1  593 by fraud is meant an intention to deceive whether it be from any expectation of advantage to the party himself or from the ill will towards the other is immaterial
 This passage for the first time brings out the distinction between an advantage derived by the person who deceives in contrast to the loss incurred by the person deceived
Buckley
J in Re London  Clobe Finance Corporation Ltd 1 brings out the ingredients of fraud thus  To deceive is I apprehend to induce a man to believe that a thing is true which is false and which the person practising the deceit knows or believes to be false
defraud is to deprive by deceit it is by deceit to induce a man to act to his injury  More tersely it may be put that to deceive is by falsehood to induce a state of mind to defraud is by deceit to induce a course of action The English decisions have been elaborately considered by the Court of Criminal Appeal in R vs Welhant 2
In that case hire purchase finance companies advanced money on a hire purchase form and agreement and on credit sale agreements witnessed by the accused
The form and agreements were forgeries The accused was charged with offences of Uttering forged documents with intent to defraud
It was not proved that he had intended to cause any loss of once to the finance companies
His intention had been by deceit to induce any person who was charged with the duty of seeing that the credit restrictions then current were observed to act in a way in which lie would not act if he had known the true facts namely not to prevent the advancing of large sums of money exceeding the limits allowed by law It the time
The Court held that the said intention amounted to intend to defraud
1 1903 1 ch 732
2  264 266
594 Hilbery J speaking for the court pointed out the distinction between deceit and defraud and came to the conclusion that to defraud is to deprive by deceit Adverting to the argument that the deprivation must be something of value i e economic loss the learned judge observed We have however come to the conclusion that this is too narrow at view
While no doubt in most cases of an intention to defraud the intention is to cause an economic loss  there is no reason to introduce any such limitation
Provided that the intention is to cause the person deceived to act to his real detriment it matters not that lie suffers no economic loss
It is sufficient if the intention is to deprive him of a right or to induce him to do something contrary to what it would have been his duty to do had lie not been deceived
 On the basis of the said principle it was held that the accused by deceit induced the finance companies to advance moneys contrary to the credit restrictions and that he was guilty of the offence of forgery
This decision is therefore a clear authority for the position that the loss or the injury caused to the person deceived need not be economic loss
Even a deprivation of a right without any economic consequences would be enough
This decision has not expressed any definite opinion on the question whether a benefit to the accused without a corresponding loss to the person deceived would amount to fraud
But it has incidentally touched upon that aspect
The learned judge again observed      
This the appellant was doing in order that he might benefit by getting further loans
 This may indicate that a benefit derived by the 595 person deceiving another may amount to an act to defraud that other
A full Bench of the Madras High Court  in Kotamraju Venkatrayadu vs Emperor 1 had to consider the case of a person obtaining admission to the matriculation examination of the Madras University as a private candidate producing to the Registrar a certificate purporting to have been signed by the headmaster of it recognized High School that he was of good character land had attained his 20th year
It was found in that case that the candidate had fabricated the signature of the headmaster
The court held that the accused was guilty of forgery
White CJ observed  Intending to defraud means of course something more than deceiving He illustrated this by the following example A tells B a lie and B believes him
B is deceived but it does not follow that A intended to defraud B
But as it seems to me if A tells B a lie intending that B should do something which A conceives to be to his own benefit or advantage and which if done would be to the loss or detriment of B A intends to defraud B The learned Chief justice indicated his line of thought which has some bearing on the question now raised by the following observations  I may observe however in this connection that by section 24 of the Code a person does a thing dishonestly who  does it with the intention of causing wrongful gain or wrongful loss
It is not necessary that there should be an intention to cause both
On the analogy of this definition it might be said that either an intention 1 Mad
999697
596 to secure a benefit or advantage on the one hand or to cause loss or detriment on the other by means of deceit is an intent to defraud
 But he found in that case that both the elements were present
BensonJ pointed out at p 114  I am of opinion that the act was fraudulent not merely by reason of the advantage which the accused intended to secure for himself  by means of his  deceit but also by reason of the injury which must necessarily result to the University and through it to the public from such acts if unrepressed
The University is injured if through the evasion of its byelaws it is induced to declare that certain persons have fulfilled the conditions prescribed for Matriculation and are entitled to the benefits of Matriculation when in fact they have not fulfilled those conditions for the value of its examinations is depreciated in the eyes of the public if it is found that the certificate of the University that they have passed its examinations is no longer a guarantee that they have in truth fulfilled the conditions on which alone the University professes to certify them as passed and to admit them to the benefis of Matriculation
 Boddam J agreed with the learned Chief justice and Benson J
This decision accepts the principle laid down by Stephen namely that the intention to defraud is made up of two elements first an intention to deceive and second the intention to expose some person either to actual injury or risk of possible injury but the learned judges were also inclined to hold on the analogy of the definition of dishonestly in section 24 of the Code that intention to secure a or advantage to the deceiver satisfies the second con dition 597 The Calcutta High Court dealt with this question in Surendra Nath Ghose vs Emperor 1 There the accused affixed his signature to a kabuliat which was not required by law to be attested by witnesses after its execution and registration below the names of the attestings witnesses but without putting a date or alleging actual presence at the time of its execution
The court held that such an act was not fraud within the first clause of section 464
of the Penal Code inasmuch as it was not done dishonestly or fraudulently within the meaning of sections 24 and 25 thereof
Mookerjee J defined the words intention to defraud thus The expression intent to defraud implies conduct coupled with intention to deceive and thereby to injury in other words defraud involves two conceptions namely deceit and injury to the person deceived that is infringement of some legal right possessed by him but not necessarily deprivation of property
 This view is in accord with the English decisions and that expressed by the Full Bench of the Madras High Court
This decision does not throw any light on the other question whether advantage to the deceiver without a corresponding loss to the deceived would satisfy the second ingredient of the expression intent to defraud
A division Bench of the Bombay High Court in Sanjiv Ratnappa vs Emperor 2 had also occasion to consider the scope of the expression fraudulently in section 464 of the Penal Code
The court held that for an act to be fraudulent there must be some advantage on the one side with a corresponding loss on the other
Adverting to the argument that an advantage secured by the deceiver would constitute fraud Broomfield J observed thus I think in view of the Bombay decisions to which I have referred we must hold that that 1 Cal 75 89 90
2 AIR 1932 Bom
545 550
598 is an essential ingredient in the definition of forgery
In the great majority of cases the point is not very material  
But there many occasionally be a case in which the element of loss or injury is absent and I think the present is such a case
 This decision therefore does not accept the view of White C J of the Madras High Court
A Division Bench of the Lahore High Court in Emperor vs Abdul had also expressed its view on the meaning of the word fraudulently The learned Judges accepted Stephen s definition but proceeded to observe as follows It may be noted in this connection that the word  injury as defined in section 44 Penal Code is very wide as denoting any harm whatever illegally caused to any person in body mind reputation or property The learned judges were willing to assume that in almost every case an advantage to one would result in an injury to the other in the widest sense indicated by section 44 of the Penal Code
The other decided case cited at the Bar accept the necessity for the combination of a deceit by one and injury to other constitute an act to defraud and therefore it is not necessary to multiply citations
No other decision cited at the Bar throws any light on the further question namely whether an advantage secured to the deceiver without a corresponding loss to the deceived would satisfy the second condition laid down by the decisions
To summarize  the expression  defraud inoslves two elements namely deceit and injury to the person deceived
injury is something other than 1 AIR 1944 Lah
380382
599 economic loss that is  deprivation of property whether movable or immovable or of money and it will include any harm whatever caused to any person in body mind reputation or such others
In short it is a non economic or non pecuniary loss
A benefit or advantage to the deceiver will almost always cause loss or detriment to the deceived
Even in those rare cases where there is a benefit or advantage to the deceiver but no corresponding loss to the deceived the second condition is satisfied
Now let us apply the said principles to the facts of the present case
Certainly Dr Vimla was guilty of deceit for though her name was Vimla she signed in all the relevant papers as Nalini and made the insurance company believe that her name was Nalini but the said  deceit did not either secure to her advantage or cause any non economic loss or injury to the insurance company
The charge does not disclose any such advantage or injury nor is there any evidence to prove the same
The fact that Dr Vimla said that the owner of the car who sold it to her suggested that the taking of the sale of the car in the name of Nalini would be useful for income tax purposes is not of any relevance in the present case for one reason the said owner did not say so in his evidence and for the other it was not indicated in the charge or in the evidence
In the charge framed she was alleged to have defrauded the insurance company and the only evidence given was that if it was disclosed that Nalini was a minor the insurance company might not have paid the money
But as we have pointed out earlier the entire transaction was that of Dr Vimla and it was only put through in the name of her made minor daughter for reasons best known to herself
On the evidence as disclosed neither was she benefited nor the insurance company incurred loss in any sense of the term
In the result we allow the appeal and hold that the appellant was not guilty of the offence under 600 sections 467 and 468 of the Indian Penal Code
The conviction and sentence passed on her are set aside
Fine if paid is directed to be refunded to the appellant Appeal allowed


Summary:
Dr Vimla purchased a car in the name of her minor daughter Nalini aged about 6 months
The price of tile car was paid by her
The transfer of the car was notified in the name of Nalini to the Motor Registration Authority
The insurance policy already issued was transferred in the name of Nalini after the proposal form was signed by Dr Vimla
Subsequently Dr Vimla filed two claims on the ground that the car met with accidents
She signed the claim forms as Nalini
She also signed the receipts acknowledging the pay ment of compensation money as Nalini
Dr Vimla and her husband were prosecuted under sections 120 B 419 467 and 468 of the Indian Penal Code
Both the accused were acquitted by the Sessions Judge
The State went in appeal and the High Court convicted Dr Vimla under section 467 and 468 of the Indian Penal Code
Dr Vimla came to this Court by special leave
Held that appellant was not guilty of the offence under section 467 and 468 of the Indian Penal Code
She was certainly guilty of deceit because though her name was Vimla she signed in all the relevant papers as Nalini and made the Insurance Company believe that her name was Nalini but the said deceit did not either secure to her advantage or cause any noneconomic loss or injury to the Insurance Company
The charge did not disclose any such advantage or injury nor was there any evidence to prove the same
The entire transaction was that of Dr Vimla and it was only put through in the name of her minor daughter
Nalini was in fact either a Benamidar for Dr Vimla or her name was used for luck or other sentimental considerations
The Insurance Company would not have acted differently even if the car stood in the name of Dr Vimla
586 The definition of false document  is a part of the defini tion of forgery  and both must be read together
If so read the ingredients of the offence of forgery relevant to the present case are as follows 1 fradulently signing a document or a part of a document with an intention of causing it to be believed that such document or part of a document was signed by another under his authority  and 2 making of such a document with an intention to commit fraud or that fraud may be committed
The expression fraud  involves two elements deceit and injury to the person deceived
Injury is something other than economic loss that is deprivation of property whether movable or immovable or of money and it will include and any harm whatever caused to any person in body mind reputation or such others
In short it is a non economic or non pecuniary loss
A benefit or advantage to the deceiver will almost always cause loss or detriment to the deceived
Even in those rare cases where there is a benefit or advantage to the deceiver but no corresponding loss to the deceived the second condition is satisfied
Haycraft vs Creasy   in re
London and Globe Finance Corporation Ltd R vs Welham  Kotamraju Yenkatrayadu vs Emperor Mad 90 Surendra Nath Ghose vs Emperor Cal 75 Sanjiv Ratnappa vs Emperor A I R and Emperor vs Abdul Hamid A 1
R  referred to