Chapter XVII, Section 405 to 409 of the Indian Penal Code, 1860 deals with Criminal Breach of Trust. Section 405 of the Indian Penal Code defines criminal breach of Trust. Section 406 of the Code prescribes the Punishment for criminal breach of trust. which may extends to 3 years of imprisonment or fine or both. 


1) Definition of Criminal breach of trust :

           Section 405 of the Indian Penal Code, defines Criminal breach of trust  - Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits "criminal breach of trust".

 Explanation 1-

  A person, being an employer of an establishment whether exempted under section 17 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) or not who deducts the employees' contribution from the wages payable to the employee for credit to a Provident Fund or Family Pension Fund established by any law for the time being in force, shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said law shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.

 Explanation 2 - 

   A person, being an employer, who deducts the employees contribution from the wages payable to the employee for credit to the Employees' State Insurance Fund held and administered by the Employees' State Insurance Corporation established under the Employees' State Insurance Act, 1948 (34 of 1948), shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said Act, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.

Illustrations 

     (a) A, being executor to the will of a deceased person, dishonestly disobeys the law which directs him to divide the effects according to the will, and appropriates them to his own use. A has committed criminal breach of trust.

     (b) A is a warehouse-keeper, Z, going on a journey, entrusts his furniture to A, under a contract that it shall be returned on payment of a stipulated sum for warehouse-room. A dishonestly sells the goods. A has committed criminal breach of trust.

     (c) A, residing in Calcutta, is agent for Z, residing at Delhi. There is an express or implied contract between A and Z, that all sums remitted by Z to A shall be invested by A, according to Z's direction. Z remits a lakh of rupees to A, with directions to A to invest the same in Company's paper. A dishonestly disobeys the directions and employs the money in his own business. A has committed criminal breach of trust.

     (d) But if A, in the last illustration, not dishonestly but in good faith, believing that it will be more for Z's advantage to hold shares in the Bank of Bengal, disobeys Z's directions, and buys shares in the Bank of Bengal, for Z, instead of buying Company's paper, here, thought Z should suffer loss, and should be entitled to bring a civil action against A, on account of that loss, yet A, not having acted dishonestly, has not committed criminal breach of trust.

      (e) A, a revenue-officer, is entrusted with public money and is either directed by law, or bound by a contract, express or implied, with the Government, to pay into a certain treasury all the public money which he holds. A dishonestly appropriates the money. A has committed criminal breach of trust. (f) A, a carrier, is entrusted by Z with property to be carried by land or by water. A dishonestly misappropriates the property. A has committed criminal breach of trust.


Ingredients : 

    To invoke Section 405 of the Indian Penal Code, 1860 following ingredients are to be satisfied :

    (1) The accused must be entrusted with property or with dominion over property ;
    
    (2) The person so entrusted must –
    
      (a) Dishonestly misappropriate or convert to his own use that property, or
    
      (b) Dishonestly use or dispose of that property or wilfully suffer any other person to do so.
   
                   (i) in violation of any directions of law prescribing the mode in which such property is to be discharged.
           
                   (ii) Any Legal contract made touching discharge of such trust.

              The offence under Section 405 is non-cognizable, bailable, and triable by a magistrate of first class.

2) Punishment for criminal breach of trust : 

  Section 406 of the Indian Penal Code prescribes the punishment for criminal breach of trust it says that, whoever commits 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.


3) Criminal breach of trust by carrier, etc.

According to Section 407 of the Indian Penal Code says that whoever, being entrusted with property as a carrier, wharfinger or warehouse-keeper, commits criminal breach of trust, in respect of such property, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

This is an aggravated form of criminal breach of trust. .

Ingredients :

To invoke Section 407 of the Indian Penal Code following ingredients are to be satisfied.

  1) The accused is a carrier, warehouse-keeper or wharfinger

  2) The accused was entrusted with the property

  3) The accused committed criminal breach of trust of the Property.

The offence under this Section is cognizable, non-bailable,compoundable and triable by Magistrate of first class.

4) Criminal breach of trust by clerk or servant. 

         According to section 408 of the Code, whoever, being a clerk or servant or employed as a clerk or servant, and being in any manner entrusted in such capacity with property, or with any dominion over property, commits criminal breach of trust in respect of that property, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

   This section will not apply if the accused is not a clerk or servant.

Ingredients :

             To constitute the offence under Section 408 of the code, following ingredients must be satisfied.

1) The accused was clerk or servant

2) The accused was entrusted with the property.

3) The accused committed criminal breach of trust in respect of such property.


The offence under Section 409 of the Code is cognizable, non-bailable, non-compoundable and triable by Magistrate of first class.


5) Criminal breach of trust by public servant, or by banker, merchant or agent.

                Section 409 of the Code says that whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, 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.


Ingredients : 

     To invoke Section 409 of the Indian penal code following essential ingredients must be satisfied.

1) The accused was a public servant , or broker or  merchant or an  agent , or an attorney;

2) The accused was entrusted with the property;

3) The accused committed a criminal breach of trust in respect of the property entrusted.


The offences under Section 409 of the code is cognizable, non-bailable,compoundable and triable by Magistrate of first class.


See also : 
 
1) Receiving Stolen Property (Section 410 to Section 414 of the Indian Penal Code 1860)

2) Abetment to Commit Suicide (Section 305 & 306 of the Indian Penal Code 1860)

3) Offences Relating to Weights and Measures (Indian Penal Code,1860)

4)  Defamation under the Indian Penal Code

5) Punishments under the Indian Penal Code,1860

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