Legal Provisions of Section 423 of Indian Penal Code, 1860.
Dishonest or fraudulent execution of deed of transfer containing false statement of consideration:
This section punishes dishonest or fraudulent execution of deed of transfer containing false statement of consideration. It states that whoever either dishonestly or fraudulently signs, executes or becomes a party to any deed or instrument which either purports to transfer any property or subject to any charge any property or any interest in the property, and which contains any false statement relating to the consideration for such transfer or charge, or relating to the person or persons for whose use or benefit it is really intended to operate, shall be punished with simple or rigorous imprisonment for a term extending up to two years, or with fine, or with both.
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ADVERTISEMENTS:
There must be dishonest or fraudulent intention on the part of the offender. With such intention he must either sign or execute or become a party to any deed or instrument. This deed or instrument must purport to transfer or subject to any charge either any property or any interest in the property.
This must contain any false statement relating to the consideration for such transfer or charge or relating to the person or persons for whose use or benefit it is really, intended to operate. A dishonest execution of a benami deed is punishable under this section. A statement that a purchaser purchased the whole land whereas the seller was entitled to sell only a part of it does not come within the purview of this section.
Where the accused obtained a loan from the government by making a false statement as to the area of land in their possession, and a charge for the consideration was created on the land, it was held that the accused could not be held guilty under this section because the statement did not relate to the consideration for the charge which was created on the land.
ADVERTISEMENTS:
But where the accused unsuccessfully sought to marry a girl and later made and registered an agreement in her favour stating falsely that he had married her and purporting to convey to her a plot of land in lieu of her dower, it was held that the accused clearly had intention to cause injury to that girl and her husband to support his own false claim to that status, and as such he was guilty under this section.
In Lakpa Sherpa v. State of Sikkim, the petitioner was alleged to have committed an offence under section 423. The magistrate took cognizance of said offence after the prescribed period of limitation of three years. The Sikkim High Court ruled that section 468 (1), Code of Criminal Procedure, 1973 contains an embargo against taking cognizance of the offences of the categories specified therein after the period of limitation. The provision is mandatory and as such consequent trial leading to conviction under section 423 is without jurisdiction and no nest in the eye of law.
The offence under this section is non-cognizable, bailable and compoundable when permitted by the court trying the case, and is triable by any magistrate.