Criminal breach of trust is defined under Section 405 of the Indian Penal Code,
1860. This section describe it as 'dishonest misappropriation' or 'conversion to
own use' another person's property. Criminal breach of trust and criminal
misappropriation (under Section 403) is distinguished from each other in terms
of the fact that in criminal breach of trust, the accused is entrusted with
property or with dominion or control over the property. this section has been
structured in a manner that it has a wide ambit, however 'entrustment' of the
property is an essential element for an offense to be penalized under Sec405 of
The provision for Criminal Breach of Trust is mentioned in Chapter XVII under
Section 405 of Indian Penal Code.
Section 405, of Indian Penal Code, states:
'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.'
The essential ingredients for the offense of criminal breach of trust are:
- The accused must be entrusted with the property or with dominion over
- The person so entrusted must use that property, or;
- The accused must dishonestly use or dispose of that property or wilfully
suffer any other person to do so in violation,
- of any direction of law prescribing the mode in which such trust is to be
- of any legal contract made touching the discharge of such trust.
Sec 409 of the Indian Penal Code defines such breach of trust by public servants
or banker, merchants or agents. In such case-situations, the concerned parties
share a fiduciary relationship particularly. Public servants are entrusted more
than ordinary people and thus have positions of greater responsibility. Thus,
any such breach of trust attracts more stringent punishment- to the extent of
life imprisonment, unlike punishment which is met out to common offenders.
Meaning Of The Criminal Breach Of Trust
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 under this
The only difference between the two is that in respect of criminal breach of
trust, the accused is entrusted with property or with dominion or control over
the property. As the title to the offense itself suggests, entrustment or
property is an essential requirement before any offense under this section takes
place. The language of the section is very wide.
The words used are 'in any
manner entrusted with property'. So, it extends to entrustments of all
kinds-whether to clerks, servants, business partners or other persons, provided
they are holding a position of trust. "The term "entrusted" found in Section
405, IPC governs not only the words "with the property" immediately following it
but also the words "or with any dominion over the property."
Meaning of Entrustment:
As the title to the offense itself suggests, entrustment of a property is an
essential requirement before any offense in this section takes place. The
language of this section is very wide. The words used are, 'in any manner
entrusted with property'. So it extends to entrustments of all kinds whether to
clerks, servants, business partners or other persons, provided they are holding
a position of 'trust'.
The word entrust is not a term of art. The term 'entrusted' is wide enough to
include in its ambit all cases in which property is voluntarily handed over for
a specific purpose and is dishonestly disposed of contrary to terms on which
possession has been handed over. Entrustment need not be expressed, it can be
In R K Dalmia vs Delhi Administration
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
In Shivnatrayan vs State of Maharashtra
, it was held that a director of a
company was in the position of a trustee and being a trustee of the assets,
which has come into his hand, he had dominion and control over the same.
However, in respect of partnership firms, it has been held[xii] that though
every partner has dominion over property by virtue of being a partner, it is not
a dominion which satisfies the requirement of s 405, as there is no 'entrustment
of dominion, unless there is a special agreement between partners making such
Dishonest misappropriation is the essence of this section. Dishonesty is as
defined in Sec.24 IPC, causing wrongful gain or wrongful loss to a person. The
meaning of wrongful gain and wrongful loss is defined in Sec. 23, IPC. In order
to constitute an offense, it is not enough to establish that the money has not
been accounted for or mismanaged.
It has to be established that the accused has
dishonestly put the property to his own use or to some unauthorized use.
Dishonest intention to misappropriate is a crucial fact to be proved to bring
home the charge of criminal breach of trust.
Difference Between Criminal Misappropriation & Criminal Breach of Trust
The Offences of Criminal Misappropriation and Criminal Breach of Trust are given
under the head of crime against property in IPC.
Section 403, IPC defines Dishonest misappropriation of property as, "Whoever
dishonestly mis-appropriates or converts to his own use any movable property."
Whereas, Section 405,IPC defines Criminal breach of trust as, "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.
|Basis of Difference
||Criminal Breach of Trust
|Provision under IPC,1860
||Offence of criminal misappropriation is
defined under section 403 of Indian Penal Code, 1860
||Offence of Criminal Breach of Trust is
defined under section 405 of
Indian Penal Code,1860
||In misappropriation, there is no contractual
||But in Criminal Breach of Trust,
there is a contractual relationship
of the offender regarding the property.
||In misappropriation, the property is obtained
by some casualty or otherwise.
||In criminal breach of trust,
the property is obtained due to the
truest vested by the owner on the
||The property is misappropriated by the
offender for his own use.
||In criminal breach of trust,
the property is misappropriated for his
own personal use. A breach of trust
includes criminal misappropriation,
but the converse is not always true.
|Nature of Property
||In, Criminal misappropriation the property is
always movable in nature.
||Whereas, in criminal breach of trust,
the nature of property can either
be movable or immovable
||Offence of Criminal Misappropriation is
punishable with imprisonment of either description for a term which may
extent to 2 years or with fine, or with both (Sec.403,IPC)
||Offence of Criminal Breach of Trust
is punishable with imprisonment
of either description for a term which
may extent to 2 years or with fine,
or with both (Sec.406,IPC)
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.
The persons having fiduciary relationship between themselves have a greater
responsibility for honesty as they have more control over the property entrusted
to them, due to their social relationship. A mere carelessness to observe the
rules of treasury ipso facto cannot make one guilty of criminal breach of trust.
There must be something more than carelessness, i.e., there should be dishonest
intention to keep the government out of moneys. Where under the rules, a public
servant is required to lodge in the treasury any government by the registers in
his hands and the public servant removes the excess from the office cash book,
he is guilty of misappropriation.
Moneys paid to Post Master for money order are public money; as soon as they are
paid they cease to be the property of the remitters and misappropriation of such
moneys will fall under this section. It is not necessary under the section that
the property in respect of which the offense is committed must be shown to the
property of the State.
Under section 409 of IPC, the entrustment of property or dominion should be in
the capacity of accused as a public servant or in the way of his business as a
banker, broker or merchant etc. The entrustment should have the nexus to the
office held by the public servant as a public servant. Only then this section
In Superintendent and Remembrancer of Legal Affairs v SK Roy
accused, a public servant in his capacity in Pakistan unit of Hindustan
Co-operative Insurance Society in Calcutta which was a unit of LIC, although not
authorized to do so directly realized premiums in cash of some Pakistani
policyholders and misappropriated the amounts after making false entries in the
To constitute an offense of Criminal Breach of trust by a public servant
punishable under Section 409 IPC, the acquisition of dominion or control over
the property must also be in the capacity of a public servant. The question
before the court was whether the taking of money directly from policyholders,
which was admittedly unauthorized, would amount to acting in his capacity as a
The Supreme Court held that it is the ostensible or apparent scope of a public
servant's authority when receiving the property that has to be taken into
consideration. The public may not be aware of the technical limitations of the
powers of the public servants, under some technical limitations of the powers of
the public servants, under some internal rules of the department or office
It is the use made by the public servant of his actual official capacity, which
determines whether there is sufficient nexus or connection between the acts
complained of and the official capacity so as to bring the act within the scope
of the section. So in case, it was held that the accused was guilty of an
offense under s 409.
In order to sustain the conviction under Section 409, it is required to prove:
- Entrustment of a property of which accused is duty bound to account for;
- Commission of Criminal Breach of Trust.
The prosecution dealing with cases of criminal breach of trust by a public
servant is required to prove not only that the accused was a public servant but
also was in a capacity entrusted with property or with domination over the same
and he committed breach of trust in respect of that property.
It is not necessary that the property entrusted to a public servant should be of
government. But what is important is that the property should have been
entrusted to a person in his capacity as a public servant.