INVESTIGATION OF FRAUD AND FORGERY

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SK.MASTAN VALI, B.COM, LLB, MCA

ADVOCATE, HIGH COURT OF A.P., HYD 1

ECONOMIC OFFENCES

Basic Points in the Economic Offenses…

Fraud

Economic Offences

Forgery

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ECONOMIC OFFENCES

Basic Parts in the Economic Offenses… Offences

Economic Offence Illegal

All Ill-legals are not Offences.

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ILLEGAL

Section 43 IPC explains The word “illegal” is applicable to everything which is prohibited by law An offence Which furnishes a ground for civil action 4

OFFENCE

Section 40 IPC explains – “OFFENCE” • Thing made punishable by IPC

Offence

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MOTIVE FOR ECONOMIC OFFENCES

• Gain by unlawful means of property • To which the person gaining is not legally entitled • Loss by unlawful means of property • To which the person losing is legally entitled Wrongful Gain Wrongful Loss Gaining Wrongfully Losing wrongfully • A person • retains wrongfully • acquires wrongfully • A person is wrongfully • kept out of property • Deprived of property 6

ELEMENTS IN ECONOMIC OFENCE

Section 24, 25 AND 415 IPC explains • Whoever does

anything with the intention of

• causing wrongful gain to one person • causing wrongful loss to another person Dishonest Fraudulent • If a person does

that thing with intent to defraud but not otherwise

• “Inducement” means

making false statement at the time of promise or make belief promise Inducement Deception

• A dishonest

concealment of fact

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DIFFERENT TYPES OF PROPERTY

There are four types of Properties namely… Movable Immovable Testamentary Valuable Security / Negotiable Instrument 8

MOVABLE PROPERTY

Section 22 IPC explains Corporeal Property of every description is movable property Land and things attached to earth is not Movable property Permanently fasten to anything which is attached to earth is not Movable property 9

DOCUMENT

Section 29 IPC explains Any matter Expressed or described upon any substance By means of letters, figures or marks Or by more than one of those means • By what means and upon what substance described is immaterial • Expressed through letters are deemed to be express.

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VALUBLE SECURITY

Section 30 IPC explains

A Document whereby

• Created • Transferred • Extended • Restricted • Extinguished • Released

Legal right is

A person acknowle dges that • He lies under legal

liability or

• He has not a certain

legal right.

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WILL

Section 31 IPC explains – A “Will” denotes Any testamentary document 12

ACTS AND OMISSIONS

Section 32 and 33 IPC explains

Act

• A series of acts as single act

Omission

• A series of omission as single omission Acts done extends also to illegal omission 13

POSSESSION OF PROPERTY

Section 27 IPC explains

Clerk Wife Servant

Includes possession of the above persons 14

COUNTERFEIT

Section 28 IPC explains Intending by means of that resemblance to practice deception Knowing it to be likely that deception will thereby be practiced

Whoever causes one thing to resemble another thing

It is not essential that the imitation should be exact Counterfeit is always presumed that it is for deception.

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FRAUD IS COMMITTEED

Fake documents Fake things

By Creating

Fake Electronic Records Fake Currency Fake Seals / Marks 16

FRAUD

Fraud is of ….. Cheating Misappro priation Criminal Breach of Trust 17

MISAPPRIATION – SEC.403 IPC

A dishonest conversion of any movable property to his own use by finder of a lost property is called “misappropriation”

Person • By the finder Property • Abandoned / Ownerless Movable Conversion to his own use • By the accused / finder of property 18

MISAPPRIATION vs THEFT

Differences between “Theft” and “Misappropriation”

• moves the property

for dishonest taking of that property is called “Theft”

• A dishonest conversion

of any movable property to his own use by finder of a lost property is called “misappropriation”

Theft Misappro priation • The person himself first

separates the property from the real owner and thereafter converts to his own use.

378 IPC 403 IPC • The person will first find

the abandoned / ownerless property and thereafter without any reasonable enquiry, converts to his own use.

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CRIMINAL BREACH OF TRUST

Sec. 405 IPC explains

Dishonestly uses or disposes of that property in violation of terms and conditions or law Dishonestly misappropriates or converts to his own use Willfully suffers any other person so to do

Whoever after entrustment or dominion over property

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CRIMINAL BREACH OF TRUST

Types of Entrustment or Dominion over Property

GPA • General Power of Attorney • Legal Representative • Employee • Agent Employment Agreements • Oral Lease • General deeds 21

MISAPPRIATION vs CR.BR. TRUST

Differences between “Cr. Br. Trust” and “Misappropriation”

• Entrustment of Property or dominion over property by real owner or his Representative • No such entrustment Criminal Breach of Trust Misappro priation • Both movable and immovable property 405 IPC 403 IPC • Movable Property 22

STOLEN PROPERTY

Section 410 IPC – explains “Stolen Property”

Property which has been criminally misappropriated Property in which criminal breach of trust has been committed

Stolen Property

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To part with property

CHEATING

Section 415 IPC – explains

To do an act or omission which cause damage or harm to reputation of a person

Fraudulent or dishonest Inducement Note: - Mere breach of contract is not cheating

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Promise

CRIMINAL NATURE CHEATING

When cheating does not become civil in nature….

Authority

• Make belief promise • Statement at the time of making is not true • He is not an authorised to make promise • Exceeds his authority.

Breach of contract is not cheating Sec. 415 Illus. (g) IPC

Transactio ns

• Misrepresentations in the transactions.

• Fake transactions Intentions • Dishonest • Fraudulent Acts • Not taken any action relating to promise 25

FORGERY – 463 IPC

To enter into any express or implied contract To the Public To cause any person to part with property To any person To support Claim or title 1.Damage or injury to 2. Commit fraud or fraud may be committed Whoever makes false record or electronic record with intent to: 26

FALSE DOCUMENT – 464 IPC

1.Makes and present knowing that it was not signed by proper person False document 3. Causes to sign in view of intoxication, unsound mind and deception 2.Cancelled or altered without authority

Note:- Anti dating signature of a man amounts to forgery

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FORGED DOCUMENT – 467 IPC

A false document made by forgery is designated as “Forged

Document” No Limitation

Forgery for the purpose of cheating has no limitation period to initiate criminal proceedings.

Forged document

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COLLECTION OF DOCUMENTS

Obtaining alleged document is essential and can be obtained by

ISSUE NOTICES • Notices u/s.91 r/w 149, 156 Cr.P.C. may be issued to any person including admin office of the Court.

By search and seizure • Take physical possession of documents by search and seizure U/s.100 or 165 Cr.P.C.

By requesting Court • By requesting court U/s.73 Cr.P.C., finger prints of the accused can be taken.

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INVESTIGATION OF MISAPPROPRIATION CASE

Charge sheet should have the following details…

Find out owner of property How property was lost by real owner Total wrongful gain of the accused How property was disposed by accused How lost property was acquired by accused 30

INVESTIGATION OF CRIMINAL BREACH OF TRUST Charge sheet should have the following details…

What is the property and its real owner details Entrustment mode i.e. by oral or written deed?

Total wrongful gain of the accused How property was disposed by accused Terms and condition of entrustment and violations by accused 31

INVESTIGATION OF CHEATING CASES

Charge sheet should have the following details…

What is the promise made by accused Total wrongful gain of the accused Whether the versions of accused are true at the time of making promise Total wrongful loss by the victim on the inducement Is there any breach of contract or not?

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INVESTIGATION OF FORGERY CASES

Charge sheet should have the following details…

What is the document What is wrong in the document Total wrongful gain of the accused / wrongful Loss of victim Mode of misuse of the said document by accused How the accused got the said document 33

Thank you

• Sk. Mastan Vali, B.Com, LLB, MCA,

Advocate, High Court of Hyderabad

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