Cheating and dishonest inducement not established where the underwriting agreement was genuine and no deceptive representation was proved.

Cheating was not made out because the underwriting agreement was found genuine, which negatived any allegation that the arrangement itself was fictitious. No proved representation was shown to have deceived the company into paying the underwriting commission, and the fact that shares were canvassed by persons other than the named underwriters did not by itself establish fraudulent or dishonest inducement. The charge also did not support an alternative case based on deception through the statutory report, and the matter could not be converted into criminal breach of trust in the absence of a State appeal against acquittal on that count.

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Issues: Whether the appellants committed cheating by inducing the company to pay underwriting commission on the basis of the alleged underwriting arrangement.

Analysis: Cheating under the Penal Code requires deception of the victim and a fraudulent or dishonest inducement causing the victim to part with property or act to its prejudice. The finding that the underwriting agreement was genuine negatived the charge that the agreement itself was fictitious. On the material on record, there was no proved representation to the company that was shown to have deceived it into paying the commission, and the mere fact that shares were canvassed by persons other than the named underwriters did not by itself establish deception or dishonest inducement. The charge as framed also did not match any alternative case of deception through the statutory report, and the court declined to convert the matter into one of criminal breach of trust in the absence of an appeal by the State against the acquittal on that count.

Conclusion: The offence of cheating was not made out and the appellants were entitled to acquittal.

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