IPC 406 – Provision and Punishment for Criminal Breach of Trust

Section 406 IPC is dealing with the punishment clause of Criminal Breach of trust, defined under section 405 of the Indian Penal Code, 1860. So basically by its own heading of section 405, it is to be clear that, when any “person” putting their trust on “someone” for transferring the possession of some property to “someone” and that “someone” thereafter breaches the trust of the “person” by retaining the property by some forge way or by any other act, then such type of activities done by any person has come under the ambit of a criminal act under the provision of Indian Penal Code, 1860. The offences of criminal breach of trust, as defined under section 405, is very similar to the offence of embezzlement under the English law.

Furthermore, to constitute the offence of criminal breach of trust under section 405, it must be established that the accused was entrusted with some property or power over the property of other person and that the person with mala-fide intention misappropriated it or converted it to their use. In short, the section reads as ‘dishonest misappropriation’ or ‘convert the property to own use’ some other person’s property. Criminal breach of trust and criminal misappropriation (under Section 403) is distinct from each other in the context of the fact that in the criminal breach of trust, the accused person is entrusted with property or control over the property.

Provisions under IPC: –

That the provision related to Criminal Breach of Trust is mentioned under Chapter VI (of offences against the body) from section 405 to 409. Whereas section 405 defines Criminal Breach of Trust, section 406 provides punishment of offence defining u/s 405 and section 407-409 sets when some specific people and their punishment commit the wrong of breach of trust.

Although Section 405 has a wide ambit, however ‘entrustment’ of the property is an essential ingredient for an offence to be punished under Section 406 of IPC.

Some of the other essential elements of the offence of Criminal Breach of Trust under Section 405 are the following: 

1. giving a charge of their property to any person in whom confidence is placed or providing any power over property;
2. Also, the person is entrusted:-
   •  With mala-fide intention misappropriates the property or converts the property to his use or,
   • With the mala-fide intention uses or disposes of that property or willfully suffers any person of any contracts which is legal made touching the discharge of such kind of trust.

Section 405 of the IPC extends to the entrustment of all type – whether, to clerks, servants, business persons or some other persons, just one thing is taken into consideration that, they are holding a position of trust. Entrustment need not be express always, and it may be implied.

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Punishment (Under Section 406 IPC) 

Whoever commits offences defined under section 405 of IPC shall be punished with imprisonment which may extend to three years, or with fine, or with both.

Case laws: –

In the State of Gujarat vs. Jaswantlal Nathalal (AIR 1968 SC 700.) Supreme Court held pronounce that the expression ‘entrustment’ carries with it the implication that the person handing over any property or on whose behalf that property is handed over to another person, they continue to be its owner.

Further, the person who is handing over the property must have confidence in the person taking the property. To create a relationship based on trust between them. Only the transaction of sale cannot amount to an entrustment. If the accused had infringed or violated the conditions of purchase, the only legal help is to prosecute him under the law.

Stridhan and Criminal Breach of Trust: –

Basically, In Stridhan it includes all kind of gifts given by the husband to his wife before their wedding; Also, gifts given by the husband or as we can say (groom) and his family, or other guests or persons, and the wife’s (bride) parents to the wife at the time of marriage, and any type of gifts given to her after the marriage by a person including her parents, her husband and his husbands family, or anybody else. In Stridhan it may include jewellery, apartments, vehicles or any other item. Stridhan is considered as the exclusive property of the wife according to the Hindu Marriage Act, and the definition is accepted by judicial authorities for other purposes too.

Though Misappropriation of Stridhan by the husband or husband’s side is a punishable crime by the provision of law defined in IPC under section 406 (“punishment for criminal breach of trust“), the definition is given under section 405, while sections 407- section 409 defines the penal provision for breach of trust in some specific relationships. The spectrum of relationships covered by these sections which include the relationship between sender and carrier of property or goods, and between an owner of the property and their employee, and between the owner of property and banker, and between public and public officials, and between an owner of the property their attornies or agents. Section 406 provides three years simple or rigorous imprisonment, both part, i.e., 407 and section 408 provides seven years simple or rigorous imprisonment, and section 409 prescribes severe punishment from ten years – life imprisonment. By some section 406 can be more correctly described as “punishment for criminal breach of trust simpliciter” in the light of these undoubtedly severe sections. There are many contradictory views regarding that the components of the Stridhan which has been gifted by the husband or the husband’s side. Some experts say that taking back such kind gifts creates only civil liability, while some of in the opinion that this may attract IPC section 406 (Criminal Breach of Trust), which is a criminal provision.

If we talk about some other aspect of the term Stridhan, any gifts given by the wife’s side to the husband or husband’s family are to be returned if and when the marriage collapses. Because If these kinds of gifts are deemed by the court to have been given “in consideration of marriage” (or as we can say as a price for marriage), then this is considered as dowry, and the husband’s side may be liable under the provision of Dowry Act for the imprisonment and /or a fine or both for demanding these items or accepting these items.

The Apex Court of the country i.e., the Supreme court quoted that the sections under 498a and 406 under the Indian penal code are widely misused, and for no reason, the husband and his family members are prosecuted and send behind bars thereby, tarnishing the reputation of the family, these sections are termed as a “legal terrorism”. Hence the apex court in a very recent judgment of “Arnesh Kumar Vs. The state of Bihar” has given some compulsory or obligatory proposal of guidelines which are as follows: –

1. All the State Governments to instruct its police officers not to directly arrest when a case under Section 498-A of the IPC is lodged but it’s necessary to satisfy themselves about the requirements for arrest under the framework laid down above flowing from Section 41, Cr.PC;
2. The police officer or in charge may provide a check-list under section 41(1)(b)(ii) of the Criminal Procedure Code which shall forward  and furnish the reasons and materials which necessitated the arrest while producing the accused person before the Magistrate for further detention;
3. The magistrate may pursue the report furnished by police, and only after recording its satisfaction, the magistrate authorizes detention.
4. Notice send (for appearing in court) in terms of Section 41A of Cr.P.C.must be reach before accused within 14 days from the date of filing the case.
5. Giving detention without recording any reason by Judicial Magistrate shall be liable for a departmental inquiry by the appropriate HC.
6. Once FIR under 498a/406 is lodged the apprehension of arrests may create even with the guidelines and safeguards as to be mandatorily implemented by the police officials. The police officer can follow the guidelines and can arrest the person.

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Conclusion

Lastly, I will conclude this article with If we have to make a person liable under the discussed provision, it is not only sufficient to establish that the property has not been mismanaged, also, It has to be established that the accused has put the property to his use with the mala-fide detention or to some unauthorized use. And Negligence does not come under the ambit of ‘dishonestly keeping the property in possession,’ it’s an exception.

The wrong of breach of trust under Section 406 is cognizable, and a warrant should, ordinarily, an issue in the first aspect. The wrong is not bailable. It is only compoundable with Court permission when the value of the property does not exceed Rs. 250 and not compoundable otherwise, and is triable by a Magistrate of the first or second class.