The Indian Penal Code, 1860 contains several offences against properties under Chapter XVII. While most of these offences require physical movement of properties by offenders, some just require dishonest intentions. For example, criminal breach of trust is one such offence. The basic element of this offence is the violation of trust with respect to the usage of properties.
Criminal Breach of Trust
According to Section 405, this offence requires a person to entrust a property or dominion over it onto another. This is basically a form of trust which the victim accords on the offender with respect to his property.
Secondly, the offender must misappropriate or convert that property to his own use. He may even dishonestly use or dispose of that property by violating a law regulating that position of trust. This may even lead to the violation of any express or implied contract between the offender and the victim.
For example, A may lend his car to his friend B to use it for transportation. B, instead, uses it for transporting illegal goods like ivory. Here, B is guilty of criminally breaching A’s trust.
Ingredients of the Offence
Section 405 involves the following ingredients:
(1) Entrusting a person with a property or dominion over that property; and
(2) The person entrusted
(a) dishonestly misappropriates the property or converts it to his own use; or
(b) dishonestly uses or disposes of the property or willfully suffers another person to do so by violating –
(i) any law regulating the discharging of that trust; or
(ii) any legal contract regulating the discharging of that trust.
Entrusting a Property
The word “entrusting” does not contain any legal definition under the Code. In general terms, it basically means handing over possession of some property onto another person. Generally, such transfer of possession does not alienate ownership or other proprietary rights.
Furthermore, “entrusting” property requires the creation of some fiduciary relationship. In other words, the person receiving the property must be in a legal position of trust. In other words, the person entrusting the property must only transfer possession over it for a specific purpose.
Dishonestly violating the Trust
The crux of this offence requires the person in possession of the property breaches trust with mala fide intentions. This is clear from the use of the word “dishonestly” in Section 405. Therefore, a dishonest intention is important; merely committing a mistake is not enough.
Secondly, this dishonest intention must translate into misappropriation or misuse of the property. Even its disposal is sufficient is such disposal violates a law or a legal contract regulating the trust.
An interesting example of this offence occurs when an employer has to pay pension or provident fund to his employees. The amount he has to pay is deemed to be property entrusted to him under this provision. Therefore, if he defaults in paying pension or provident fund, he is guilty under Section 405.
Similarly, if an employer deducts is employee’s contribution towards Employees State Insurance Act and makes default in paying it according to the law, he is also guilty of this offence.
Punishment for Criminal Breach of Trust
According to Section 406, the punishment for this offence is imprisonment up to 3 years or fine or both. In order to prosecute the offender, the complainant has the burden to prove his guilt.
In certain special transactions like transportation of goods, some persons may be in positions of trusts. For example, they may work as carriers, wharfingers or warehouse-keepers. The punishment for breaching trust under such cases includes imprisonment up to 7 years with fine.
Similarly, persons like office clerks and employees also enjoy a position of trust inherently under their duties. If they criminally breach that trust, their punishment also includes imprisonment up to 7 years with fine.
Even public servants, bankers, merchants, brokers, attorneys or agents enjoy positions of trust with respect to properties. For example, a person may entrust his property with his advocate under a power of attorney agreement. Breach of trust by such persons is punishable with higher imprisonment up to 10 years with fine.
Solved Questions on Criminal Breach of Trust
(a) Criminal breach of trust requires a person to entrust a property or __________ over that property.
(b) The trust must breach either a law or a __________ regulating its discharge.
(c) Criminal breach of trust by a public servant is punishable with higher imprisonment up to __________ years.
Answers: (a) dominion (b) contract (c) 10