This article has been written by Mr. Satyam Singh, a student studying BBA LLB (H) from Netaji Subhas University, Jamshedpur. The author is a 3rd year law student.

Introduction 

Section 405 of the Indian Penal Code (IPC) deals with the offense of criminal breach of trust. This offense occurs when a person is entrusted with property or assets, and they dishonestly misappropriate or convert that property for their own use or for someone else’s use without their permission. The offense of criminal breach of trust is a serious criminal offense that can result in imprisonment and fines. This article will provide an introduction to the offense of criminal breach of trust under Section 405 of the IPC, including its legal elements and potential consequences.

What Is Criminal Breach of Trust

Criminal breach of trust is an offense under the Indian Penal Code that occurs when a person entrusted with property or assets dishonestly misappropriates or converts that property for their own use or for someone else’s use without their permission. Section 405 of the IPC provides the legal definition of this offense.

To prove the offense of criminal breach of trust, the prosecution must establish the following legal elements:

• Entrustment of property or assets to the accused
• Dishonest misappropriation or conversion of that property or assets
• Intention of the accused to cause wrongful loss to the owner of the property or assets, or to make wrongful gain for themselves or someone else.

A key feature of this offense is that the accused has been entrusted with the property or assets, and they have violated that trust by dishonestly misappropriating or converting the property.

There have been several cases in India where individuals have been convicted of criminal breach of trust under Section 405 of the IPC. One such case is the State of Maharashtra v. Prakash and Others (1999), where the accused were found guilty of misappropriating funds from the government by fraudulently obtaining loans and misusing the funds. The court found that the accused had breached the trust placed in them and committed the offense of criminal breach of trust under Section 405 of the IPC.

In another case, the Supreme Court of India in the case of S. Gopal Reddy v. State of A.P. (1996) held that even if the accused did not intend to cause wrongful loss or gain, but they dishonestly misappropriated or converted the entrusted property, they could still be convicted of criminal breach of trust under Section 405 of the IPC.

Overall, criminal breach of trust is a serious offense under Indian law, and those found guilty can face imprisonment and fines. It is essential to establish a clear understanding of the elements of this offense to avoid any legal repercussions.

The entrustment of property or assets

The entrustment of property or assets to the accused is one of the key legal elements of the offense of criminal breach of trust under Section 405 of the Indian Penal Code (IPC). This means that the accused must have been entrusted with the property or assets that they are accused of misappropriating or converting.

The entrustment can be express or implied, and it may arise from a formal agreement, contract, or an informal understanding. The entrustment can also be voluntary or involuntary, as long as the accused had control or possession of the property or assets in question.

For example, if a person entrusts their vehicle to a mechanic for repair, the mechanic has been entrusted with the vehicle. If the mechanic then sells the vehicle without the owner’s permission, they can be charged with criminal breach of trust under Section 405 of the IPC.

Similarly, if an employer entrusts money to an employee for a specific purpose, and the employee uses the money for their personal benefit instead, they can also be charged with criminal breach of trust.

To establish the element of entrustment, the prosecution must provide evidence that the accused was entrusted with the property or assets that they are accused of misappropriating or converting.

Property

In the context of the offense of criminal breach of trust under Section 405 of the Indian Penal Code (IPC), “property” refers to any movable or immovable property, money, valuable security or other asset that has been entrusted to the accused. The property or asset can be physical, such as a car or a piece of jewelry, or intangible, such as funds in a bank account or intellectual property. The property can be entrusted to the accused through an express or implied agreement, or by law.

For example, if a person entrusts their money to a financial advisor for investment purposes, the money would be considered as property for the purposes of criminal breach of trust. If the financial advisor then misappropriates or converts the money for their own benefit or for someone else’s benefit without permission, they could be charged with criminal breach of trust under Section 405 of the IPC.

It is important to note that the property must be entrusted to the accused in order for criminal breach of trust to occur. If the accused obtains the property through theft or fraud, rather than through entrustment, they may be charged with a different criminal offense under the IPC.

In conclusion, “property” plays a crucial role in the offense of criminal breach of trust, and the entrustment of property to the accused is a key legal element that must be established in order to prove the offense.

Criminal Misappropriation 

Criminal misappropriation is an offense under Section 403 of the Indian Penal Code (IPC). It occurs when a person dishonestly misappropriates or converts any movable property for their own benefit or for the benefit of another person, without that person’s permission.

In simple terms, criminal misappropriation involves the act of taking someone else’s property without their permission, and using it for one’s own benefit or the benefit of someone else. The key element of this offense is the dishonest intention of the accused to misappropriate or convert the property.

• To establish the offense of criminal misappropriation, the prosecution must prove that:
• The accused took possession of the property;
• The accused misappropriated or converted the property for their own benefit or for the benefit of another person; 
• The accused did so dishonestly.

For example, if an employee takes company funds for personal use without permission from their employer, they can be charged with criminal misappropriation under Section 403 of the IPC. Similarly, if a person borrows their friend’s car and then sells it without the friend’s permission, they can also be charged with criminal misappropriation.

The punishment for criminal misappropriation under Section 403 of the IPC is imprisonment for up to two years or a fine, or both. However, if the value of the property misappropriated exceeds Rs. 25,000, the punishment may be increased to imprisonment for up to seven years or a fine, or both.

Criminal misappropriation is a criminal offense that involves the dishonest misappropriation or conversion of movable property for personal gain or the gain of another person without permission. It is a serious offense under Indian law, and can result in significant penalties upon conviction.

Conclusion 

In conclusion, criminal breach of trust is a serious offense under Indian law that involves the breach of a legal obligation to act in good faith and protect the property or assets entrusted to an individual. The offense is committed when a person, who is entrusted with any property or asset, dishonestly misappropriates or converts the property for their own benefit or for the benefit of another person, or violates any legal obligation related to the property.

The offense of criminal breach of trust is punishable under Section 405 of the Indian Penal Code (IPC) with imprisonment for up to three years or a fine or both. If the value of the property misappropriated exceeds Rs. 1 lakh, the punishment may be increased to imprisonment for up to seven years or a fine, or both.

It is important to note that criminal breach of trust can have serious consequences, including imprisonment, fines, and damage to one’s reputation. It is crucial for individuals to act in good faith and honor the trust placed in them when entrusted with any property or assets.

Reference

• S. Gopal Reddy v. State of A.P. (1996)
• State of Maharashtra v. Prakash and Others (1999)
• https://www.legalserviceindia.com/articles/crbt.htm