Which proposition correctly states the distinction between **cheating*…

Question

Which proposition correctly states the distinction between **cheating** under section 415 IPC and **mere breach of contract**?

Accepted Answer

C. {'text': 'Cheating requires a fraudulent or dishonest intention at the very inception of the transaction, while mere breach of contract may give rise only to civil damages', 'label': 'C'}

1. The lesson cites *Shruti Enterprises v. State of Bihar and ors*, 2006 CrLJ 1961.
2. The Court held that mere breach of contract cannot give rise to criminal prosecution under section 420 unless fraudulent or dishonest intention is shown **right at the beginning** of the transaction.
3. If dishonest intention is proved at the inception, liability is criminal and the accused is guilty of cheating.
4. If only a subsequent failure to keep a representation is shown, the remedy is a civil decree for damages, not criminal prosecution.
_Source: ICSI CS Executive Paper 1 — Jurisprudence, Interpretation & General Laws, Lesson 9 (Indian Penal Code, 1860), pp. 205-224._

Answer

{'text': 'Any subsequent failure to perform a contract automatically becomes cheating once the loss to the complainant is large or where the contract concerned property of substantial value', 'label': 'A'}

Answer

{'text': 'Cheating is established whenever the buyer pays in advance and the seller fails to deliver, irrespective of intention at inception and regardless of subsequent willingness to refund the price', 'label': 'B'}

Answer

{'text': 'Cheating is distinguished by the size of loss alone; criminal liability follows once loss exceeds a fixed monetary threshold prescribed under the Indian Penal Code or any other law in force', 'label': 'D'}