Criminal Breach of Trust

Introduction

• The offence of ‘Criminal Breach of Trust’ is known as ‘embezzlement’ in the English law.
• It is enshrined under Section 405 of the Indian Penal Code,1860 (IPC).
• Chapter XVII covers the ‘Offences related to property’ and deals with the ‘Criminal Breach of Trust’.
• The offences occur when there is a delivery of property out of trust. A consequential breach of trust must take place after getting possession.

Concept

• The interest in the property is vested in someone else other than the accused.
• The accused had possession of the property after the delivery by the owner or any person on his behalf.
• The accused only had custody of the property.
• The accused does not have the right to dispose of the property he just acquires a special interest in it.
• He dishonestly misappropriates it for its own benefit.

Section 405 of IPC

• 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.

Punishment

• Section 406 of IPC: The punishment includes imprisonment of either description extendable up to 3 years or with fine or both.

Forms of Aggravated Criminal Breach of Trust

• Section 407 IPC:
  • If any person entrusted with a carrier, wharfinger or ware-housekeeper misappropriates property he shall be liable for imprisonment of either description extendable up to 7 years and also be liable to fine.
• Section 408 IPC:
  • If any clerk or servant misappropriates property entrusted in his capacity, he shall be liable for imprisonment of either description extendable up to 7 years and he shall also be liable to fine.
• Section 409 IPC:
  • If any person, being a public servant, misappropriates property he shall be liable for imprisonment of either description extendable up to 7 years and also be liable to fine.

Case Laws

• Ram Narain Popli v. Central Bureau of Investigation (2003):
  • The Supreme Court enlightened the concept of entrustment which means entrusting the possession of any property to someone without encroaching on any proprietary interest.
• State of Gujarat v. Jaswantlal Nathalal (1967):
  • The SC stated that the owner remains the owner and delivers only a special interest to the other person in the process of entrustment.
• Rashmi Kumar v. Mahesh Kumar Bhada (1996):
  • SC held that ‘Stridhan’ was also included in the ambit of property under Section 405 of IPC. If the husband or any the relative uses for its own purpose in dearth of any consent by the woman, he shall be termed to have committed the offence of ‘Criminal Breach of Trust’.

Conclusion

Hence it's clear that for an offence to fall under this section all four requirements are essential to be fulfilled. The person handing over the property must have confidence in the person taking the property. so as to create a fiduciary relationship between them or to put him in position of trustee. The accused must be in such a position where he could exercise his control over the property i.e.; dominion over the property. The term property includes both movable as well as immoveable property within its ambit. 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.