CRIMINAL BREACH OF

TRUST
SECTION 405- 409
 SECTION 405
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

1. law prescribing the mode in which such trust is to be discharged, or

2. of any legal contract, express or implied, which he has made touching

the discharge of such trust,

 commits “criminal breach of trust”.

 ELABORATION

1. There must always be entrustment in criminal breach of trust.

2. The entrustment could be either of property or of dominion over
property.
3. Thus, there must necessarily be at least two parties, one who entrusts
and the other to whom the property or the dominion over property is
entrusted.
4. The use of the words ‘in any manner’ shows that there is no fixed
mode of entrustment.
5. It may be a trust as provided under the Indian Trusts Act, 1882 or it
may be any other kind of entrustment.
6. Since the word ‘property’ and not ‘movable property’ has been used in
section 405, it is quite clear that the offence of criminal breach of trust
is not restricted to movable property only and this offence can be
committed in respect of immovable property as well.
 DIFFERENCE BETWEEN CMP AND CBT

• There is no contractual relationship of the accused with the actual owner

of the property in case of criminal misappropriation. It applies on the
conversion of the property where the offender gets possession of the
property by any casualty or anyhow where property must be movable
and he apparently misappropriated it.

• In the case of criminal breach of trust, there is a legal contractual

relationship of the accused with the actual owner of the property.
Property can be either movable or immovable. It applies to the
conversion of property held by a person in a fiduciary capacity.
 ELABORATION

• There are two distinct parts involved in the commission of the offense
of criminal breach of trust.

1. The first consists of the creation of an obligation in relation to the

property over which dominion or control is acquired by the accused.

2. The second is misappropriation or dealing with the property

dishonestly and contrary to the terms of the obligation created.

• The principal ingredients of Criminal Breach of Trust are thus

‘entrustment’ and ‘dishonest misappropriation’.
 1. ENTRUSTMENT

As the title to the offence 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’.

 ..CONTINUED..

• In common parlance, it embraces all cases in which a thing handed over

by one person to another for a specific purpose.

• 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 implied.

 R. K. DALMIA
V.
DELHI ADMINISTRATION
(1962)

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.

 SHIVNATRAYAN
V.
STATE OF MAHARASHTRA
(1980)

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.

 SECTION 406
PUNISHMENT FOR CRIMINAL
BREACH OF TRUST

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.

 SECTION407
CRIMINAL BREACH OF TRUST BY
CARRIER, ETC

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.
 SECTION 408
CRIMINAL BREACH OF TRUST BY
CLERK OR SERVANT

Whoever, being 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.
 SECTION 409
CRIMINAL BREACH OF TRUST BY
PUBLIC SERVANT, OR BY BANKER,
MERCHANT OR AGENT

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 152[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.