Understanding the Concept of Criminal Breach of Trust under section 405 to Section 409 of the Indian Penal Code.

Title :

This Article named Understanding the Concept of Criminal Breach of Trust under section  405 to Section 409 of the Indian Penal Code, which contains the background History, Practical  approach, Psychological Impact & Challenges regarding this topic. 

Introduction:  

“Trust is the easiest thing to lose, and hardiest thing in the world to get back” quoted by  R.M.Williams. It is correctly quoted by this Famous Author that Trust is important in terms of  Law it can be interpreted as Promise made by a party to do or abstain from doing something.  Promise made can be of any nature .i.e. Civil, Criminal, or Commercial. When a person breaches  the trust of another, the person has to bear the consequences.  

Background :  

Breach of Trust concept initiated from the existence of Marriage & Trading have began for  human race. The Concept was firstly highlighted in the Contract Act, 1872 as Breach of Contract  which means breach of Promises made, sanctioned through law. Similarly, in Matrimonial case,  the Breach of trust can be demonstrated as Cheating, Adultery or Bigamy which is to be  considered as Offence under section 494 of the Indian Penal Code. This Article Puts spotlight on  the Criminal Breach of Trust which is mentioned under Section 405 to Section 409 of the Indian  Penal Code.  

 The offence of Criminal Breach of Trust includes Fraud done by the Public Servant, agent,  merchant or Citizens, dishonest Misappropriation of property title or Misuse of the Entrusted  property. Nowadays there are cases of not having good title of property, Misuse of assets &  properties by the agent, Bribery and Corruption.  

Thesis : This Article contains in depth comparative analysis of the concept given under section  405 to Section 409 of the Indian Penal Code, which describes the offence of Criminal Breach of  Trust. The study emphasizes on the Background, Practical Approach & Challenges regarding this  legal offence. 

Criminal Breach of Trust :  

Criminal Breach of Trust is defined under section 405 of the Indian Penal Code for General  Purpose as a person who is entrusted with property or with dominion over Property further  dishonestly misappropriated the same for his own use or Misuses the property which was  entrusted to him.  

Section 406 defines the punishment for general criminal Breach of Trust which will be in  accordance with the nature of the offence.  

The Further sections of this offence are to categorized the offence for particular to a group,  which are as follows – 

1. Section 407 deals with Criminal Breach of Trust done by a carrier, wharfing or  Warehouse keeper.  
2. Section 408 emphasizes of Criminal Breach of Trust committed by a clerk or Servant.  
3. Section 409 puts spotlight on the offence of Criminal Breach of Trust do ne by a Public  Servant, Merchant, Agent or Banker. The Punishment is more Severe under this section  than under section 406.  

There are differences between civil & Criminal Breach of Trust which are as follows to  clarify the concept – 

1. Nature of the Breach – The nature of Breach in Civil Breach of Trust are of Civil nature  which includes violation of fiduciary duties or contractual obligations. In Criminal Breach  of Trust, the Breach is of Criminal nature which is defined under section 405 of the Indian  Penal Code.  
2. Formulation of Mens Rea – In Civil Breach of Trust, the Mens Rea is irrelevant & focus is  on fiduciary duty. In Criminal Breach of Trust, Mens Rea is essential to constitute the  offence & dishonesty is key element of the offence.  
3. Legal Proceedings – In Civil Breach of Trust, one can choose to settle the suit through  Arbitration or other Alternative Dispute Resolution mechanism. In Criminal Breach of Trust,  there is no option of Other methods but to proceed with time consuming Suit for a longer  period of time. 
4. Burden of Proof – In Civil Breach of Trust, the burden of proof is on the both sides but in  criminal Breach of Trust, the burden of proof is on Prosecutor’s side to find evidence of  Dishonest Intention & Misappropriation of Property. 

Case Laws / Legal Precedents : 

The following are cases regarding Criminal Breach of Trust & their precedents which are  followed till now – 

1. State of Gujarat v. Jaswantlal Nathalal 

Citation : AIR 1968 SC 700 

Judgement : The Hon’ble Supreme Court of India through this case set the precedent that  for commission of Criminal Breach of Trust, there is required to have property or dominion  of property being entrusted to the offender which he further dishonestly misappropriated  for his own use.  

2. R.K. Dalmia v. Delhi Administration  

Citation : AIR 1962 SC 1821 

Judgement : The Hon’ble Supreme Court of India set the precedent to charged offence of  Criminal Breach of Trust under section 405 of the Indian Penal Code, dishonest intention in  the misappropriation of property is a must have ingredient.  

3. Sardar Singh v. State of Haryana  

Citation : AIR 1977 SC 1766 

Judgement : The Hon’ble Supreme Court of India held that failure to return the property  which was entrusted does not constitute the offence of Criminal Breach of Trust unless  there was dishonest misappropriation done on the part of the accused.  

4. Velji Raghav Patel v. State of Maharashtra  

Citation : AIR 1965 SC 1433 

Judgement : The Hon’ble Court highlights the director of a company who is entrusted with  the properties of the Company & if he misses it for his own use them he will be held liable  for Criminal Breach of Trust. 

5. Surinder Singh v. State of Punjab  

Citation : AIR 1989 SC 1683 

Judgement : The Hon’ble Supreme Court of India held that to constitute the offence of  Criminal Breach of Trust, the accused must be entrusted with property & must have  dishonestly used it for himself.  

6. Jai Prakash Singh v. State of Bihar  

Citation : AIR 2012 SC 1608 

Judgement : In this Case, there was examination of sufficient evidence to whether call it  ingredient to constitute the offence of Criminal Breach of Trust by the accused.  

7. Ratanlal Rathi v. State of Maharashtra  

Citation : AIR 1997 SC 1639  

Judgement : In this mentioned Case, The Hon’ble Supreme Court of India held that the  elements to constitute the offence of Criminal Breach of Trust, the burden to prove the  existence of these elements is of Prosecutor’s lookout & give the evidence of dishonest  Misappropriation done by the accused.  

8. State of West Bengal v. Bibhuti Bhusan Bagchi  

Citation : AIR 1981 SC 89  

Judgement : In the above Case, the Hon’ble Court clarifies the need of evidence to  establish criminal Breach of Trust in the case of misappropriation by Public Servant.  

9. Indian Bank v. Satyam Fibres [India] Pvt. Ltd.  

Citation : AIR 1996 SC 2592 

Judgement : In the above mentioned Case, the Hon’ble Supreme Court of India discussed  the question of whether bank officials or bankers could be held liable for Criminal Breach  of Trust for the acts done within their boundaries of an official duty.

10.Dr. Vimla v. Delhi Administration  

Citation : AIR 1963 SC 1572  

Judgement : The Hon’ble Supreme Court of India held in this Case that the offence of  Criminal Breach of Trust involves not only Breach of Trust but also Element of Dishonesty  on the part of the offender.  

Exception to Criminal Breach of Trust :  

There are Some Exceptions to this Offence which can be given as Defense in such cases  are as follows – 

1. Bona Fide claim of Right :  

When the accused had Bona fide intention & believes to have the right on the property in  question which could act as differentiate from dishonesty element of Criminal Breach of  Trust.  

2. Absence of Mens Rea :  

The Burden of proof is on prosecutor as the accused didn’t have mala fide intention which  formulates Mens Rea. The Prosecution have to prove the Mens Rea of the accused until  that would be proved, the accused is not liable of anything.  

3. No Entrusted Property :  

If the accused have no Entrusted property then it is not possible for the accused to misuse  it or Dishonestly misappropriated the asset as it is the prime element of criminal Breach of  Trust.  

4. Performance of Contractual Obligations :

When the accused was acted in accordance with a valid contractual obligations & their  actions aligned with the terms of the contract then the accused is not guilty for the offence  of Criminal Breach of Trust.  

5. Authority of Law :  

When the a person who is charged with this offence have acted under the authority of law  or under a legal obligation then he shall not be liable for such offence.  

6. Consent of the Owner : 

When the accused has taken prior consent of the owner before doing the act, he won’t be  liable for the Criminal Breach of Trust.  

7. Mistake of Fact :  

If the said offender made mistake of fact honestly & doesn’t have any mala fide intention  then the accused won’t be liable for this offence.  

8. Acts done without causing loss to the owner :  

When the accused emphasizes with his actions no loss to the owner or damage to the  owner’s property then he won’t be liable for the offence mentioned under Section 405 of  the Indian Penal Code.  

Practical Implications :  

The Practical Aspects of this offence mentioned under Section 405 to Section 409 which  can be seen through Case laws & Precedents given above in this Article. The Punishment  given under these sections varies from the nature of the offence done by the accused.  General Punishment for such offence is 3 years of Imprisonment & fine or both.  

Challenges Regarding the Implication of this Offence : 

The implication to prevent offence of Criminal Breach of Trust has to be difficult due to  burden of proof on the Prosecution’s Side & to collect evidence regarding the case. The  following are the challenges faced while preventing or proving the offence of Criminal  Breach of Trust – 

1. Evidence of Dishonest Intention – The Prosecution has to prove the dishonest intention  of the accused which is not possible to some reasonable extend in many cases.  
2. False Cases – Many people charged others as to threatening them for money. Such false  cases of Criminal Breach of Trust when charged, the innocent people suffer severe losses.  
3. Delayed in Verdict – Due to the above reasons the justice is delayed & many cases are  still in the process of Litigation.  

Conclusion :  

The Article can be summarized into the following points – 

1. Criminal Breach of Trust is an offence covered under section 405 to Section 409 of the  Indian Penal Code.  
2. In the Criminal Breach of Trust, Significant ingredients are Dishonest Intention &  Misappropriation of the Entrusted Property.  
3. Challenges faced while preventing such offences are Difficult to finding dishonest  intention, False Allegations & delayed justice due to time consuming examinations.  

Reference :  

1. Case Laws :  

-State of Gujarat v. Jaswantlal Nathalal, AIR 1968 SC 700 

-R.K. Dalmia v. Delhi Administration, AIR 1962 SC 1821 

-Sardar Singh v. State of Haryana, AIR 1977 SC 1766 

-Velji Raghav Patel v. State of Maharashtra, AIR 1965 SC 1433 

-Surinder Singh v. State of Punjab, AIR 1989 SC 1683 

– Jai Prakash Singh v. State of Bihar, AIR 2012 SC 1608 

– Ratanlal Rathi v. State of Maharashtra, AIR 1997 SC 1639 

– State of West Bengal v. Bibhuti Bhusan Bagchi, AIR 1981 SC 89  

– Indian Bank v. Satyam Fibres [India] Pvt. Ltd, AIR 1996 SC 2592 

– Dr. Vimla v. Delhi Administration, AIR 1963 SC 1572  

1. Websites/Articles & Bare Act :  

– Section 405 Criminal Breach of Trust, indiacode.nic.in,  

https://www.indiacode.nic.in/show 

data?actid=AC_CEN_5_23_00037_186045_1523266765688&orderno=462, 1st September  2024.  

– Aashiya Rahman, Criminal Breach of Trust, blog.ipleaders.in,  

https://blog.ipleaders.in/criminal-breach-of-trust/, 8th May 2023.  

– Aishwarya Agarwal, Criminal Breach of Trust IPC, lawbhoomi.com,  https://lawbhoomi.com/criminal-breach-of-trust-ipc/, 18th July 2023.  

– Adv. Rupa Agarwal, Criminal Breach of Trust- Punishment under Section 406 of IPC,  ezylegal.com, https://www.ezylegal.in/blogs/criminal-breach-of-trust-punishment-under section-406-of-ipc, 1st September 2024.  

– Aishwarya Sandeep, CRIMINAL BREACH OF TRUST, Aishwaryasandeep.in,  https://aishwaryasandeep.in/criminal-breach-of-trust-7/, 14th June 2023.  

– Indian Penal Code, 1860, Act No. 45 of 1860, §405, §406, §407, §408, §409, Act of  Parliament, (India).