Criminal Breach of Trust

Section 405 of the Indian Penal Code, 1860 defines as under:

‘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 willfully suffers any other person so to do, commits criminal breach of trust.

What Does Criminal Breach of Trust Mean?

The offense of criminal breach of trust, as defined under section 405 of IPC, is similar to the offense of ‘embezzlement’ under the English law. A reading of the section suggests that the gist of the offense of criminal breach of trust is ‘dishonest misappropriation’ or ‘conversion to own use’ another’s property, which is nothing but the offense of criminal misappropriation defined u/s 403.

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 employee’s 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.

Essentials for Criminal Breach of Trust

The essential ingredients of Criminal breach of trust are:

  • The accused must be entrusted with property or dominion over it.
  • He must have dishonestly misappropriated the property or converted it to his own use or disposed of it in violation of such trust

The definition in the section does not restrict the property to movables or immoveable alone. In R K Dalmia vs Delhi Administration[ix], the Supreme Court held that the word ‘property’ is used in the Code in a much wider sense than the expression ‘moveable property’. There is no good reason to restrict the meaning of the word ‘property’ to moveable property only when it is used without any qualification in Section 405.

Whether the offense defined in a particular section of IPC can be committed in respect of any particular kind of property, will depend not on the interpretation of the word ‘property’ but on the fact whether that particular kind of property can be subject to the acts covered by that section.

Criminal Breach of Trust by A Public Servant, Banker, Merchant or Agent

As already seen in the previous sections, the acts of misappropriation or breach of trust done by strangers is treated less harshly than acts of misappropriation or breach of trust who enjoy special trust and are also in a position to be privy to a lot of information or authority or on account of the status enjoyed by them, say as in case of a public servant. That is why Sections 407 & 408 provide for enhanced punishment of punishment up to seven years in case of commission of offence of criminal breach of trust by persons entrusted with property as a carrier or warehouse-keeper.

In respect of public servants, a more stringent punishment of life imprisonment or imprisonment up to ten years with fine provided. This is because of the special status and the trust which a public servant enjoys in the eyes of public as a representative of the government or government-owned enterprises.

Aishwarya Says:

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