Civil breach vs criminal cheating
Commercial disputes, delayed deliveries, landlord-tenant arguments, and inability to repay a debt are matters of civil contract law, not criminal law.
For an act to constitute cheating under Section 318(4) of the Bharatiya Nyaya Sanhita (formerly Section 420 IPC), the complainant must prove that the accused had dishonest and fraudulent intention at the very moment the contract or promise was made, not merely that they later failed to pay.
Police cannot act as debt recovery agents
The Supreme Court has firmly established (in rulings such as Dalip Kaur and Vesa Holdings) that converting purely civil commercial disputes into criminal cases is an abuse of legal machinery.
Police officers have no statutory authority to summon citizens to force settlements or act as recovery agents for private debts.
Mandatory preliminary inquiry for commercial disputes
Under the Constitution Bench judgment in Lalita Kumari v. Govt. of UP, police are mandated to conduct a preliminary inquiry in commercial disputes before registering an FIR to ensure civil matters are not falsely given a criminal cloak.
What to do if threatened with a cheating FIR
Preserve all written contracts, invoices, email correspondence, and bank transaction statements demonstrating honest business dealings.
If police call you regarding a commercial dispute, submit a written reply explaining the civil nature of the transaction with documentary evidence.
This is a description of the public process, not legal advice. For advice about your own case, speak to a lawyer or the police station handling it.