Chapter 17 from sections 378 to 462 of the Indian Penal Code, 1860, deals with the offences against property. One such offence against property is the offence of criminal breach of trust.
For understanding the offence of criminal breach of trust correctly, let us split it into 3 parts: criminal, breach and trust.
- Criminal: Criminal refers to something related to a wrong or crime or something prohibited by law.
- Breach: Breach can be defined as breaking the agreement, violating rules and regulations, or contravention of some rule.
- Trust: Trust can be defined as some kind of fiduciary relationship or a belief in something; to be honest and sincere. For example, the relationship between master and servant, lawyer and client, etc.
Now let us look at what IPC says about the criminal breach of trust.
Criminal Breach of Trust – Section 405 IPC – Explained
Section 405 of IPC provides for the offence of criminal breach of trust. It provides that when a person is entrusted (means when the property is delivered out of trust) with the property of another or have some kind of control or authority over the property of another, and if that person dishonestly misappropriates or converts the property for his own use, the person is said to commit the offence of criminal breach of trust.
In simple words, if a property is delivered to another person out of trust and that person dishonestly converts the property for his own use, he commits the offence of criminal breach of trust.
For example: Ajay entrusts his watch to Karan for two days. Karan dishonestly converts the watch to his own use. Here, Karan has committed the offence of criminal breach of trust under section 405 of IPC.
Note: Section 405 of IPC does not specifically provide the type of property. Thus, the offence of criminal breach of trust may be made against any type of property, either movable or immovable.
Essentials of Criminal Breach of Trust
The following essentials must be fulfilled to hold anybody liable for the offence of criminal breach of trust:
- A person must be entrusted with some property or should have any dominion (control or authority) over the property.
- That the person:
(a) must have dishonestly misappropriated or converted the property for his own use, or
(b) should dishonestly use or dispose of that property or willfully make any other person to misappropriate the property. - Such an act must be done in violation of any law of trust or any legal contract of trust.
Punishment for Criminal Breach of Trust
Punishment for the offence of criminal breach of trust is provided under section 406 of IPC. Therefore whoever commits the offence of criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.
Case Laws Related to Criminal Breach of Trust
Here are some judicial interpretations related to criminal breach of trust:
Ram Narain Popli vs Central Bureau of Investigation (2003): In this case, the court defined the term ‘entrustment‘ of any property. Entrustment means handing over the possession of the property for some purpose that may not infer the proprietary rights.
Rashmi Kumar vs Mahesh Kumar Bhada (1996): In this case, the Supreme Court held that when the wife is entrusted with her Streedhan property and gives the dominion (authority) to her husband or any other member of the family, in such a case, if her husband or any other member of the family dishonestly misappropriated the property for their own use, the husband or other family member commits the offence of criminal breach of trust. Streedhan property is whatever a woman receives during her lifetime or a property specially belonging to a woman.
R. K. Dalmia vs Delhi Administration (1962): In this case, the court held that if the ‘partners’ are entrusted with some property and if they misappropriate the property for their own use, they commit the offence of criminal breach of trust under section 405 of IPC.
Aggravated Forms of Criminal Breach of Trust
The Indian Penal Code provides three aggravated forms of criminal breach of trust. Those are:
Let us discuss them one by one.
Criminal Breach of Trust by Carrier, etc.
Section 407 of IPC provides for the criminal breach of trust by carrier, wharfinger or warehouse-keeper. It provides that if a person is entrusted with the property as a carrier, wharfinger or warehouse-keeper and commits the offence of criminal breach of trust, then such person shall be punished with imprisonment of either description for a term which may extend to seven years and shall also be liable to fine.
Here, a carrier means a company that transports people or goods. Wharfinger means owner or keeper of the wharf (harbour).
Criminal Breach of Trust by Clerk or Servant
Section 408 of IPC provides that when the offence of criminal breach of trust is committed by a clerk or servant or a person employed as a clerk or servant, such clerk or servant shall be punished with imprisonment of either description for a term that may extend to seven years and shall also be liable to fine.
Criminal Breach of Trust by Public Servant, or by Banker, Merchant, or Agent
Section 409 of IPC provides that if a banker, merchant, factor, broker, attorney, or agent commits the offence of criminal breach of trust, such a person shall be punished with imprisonment for life or with imprisonment of either description for a term which may extend to ten years and shall also be liable to fine.
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