Criminal Breach of Trust
Criminal breach of trust is a criminal offence according to the provision of Section 405 of the Indian Penal code. This offence is similar to the offence of Embezzlement in English Law. As the name itself is indicative of violative of trust through any act which was not authorized amounts to criminal breach of trust. In this article, what amounts to criminal breach of trust, its essential elements, and some landmark cases will be discussed.
MEANING OF BREACH OF TRUST
If any person is entrusted in any manner with the property or possession of the property and if the person dishonestly uses the property or converts the property or disposes of the property in violation of any direction of law or violation any legal contract, then the other person suffers a criminal breach of trust.
In the bare reading of the section, one can understand, misappropriation of property or converting someone else’s property into own use will be an offence covered under criminal misappropriation under section 403 of IPC. What makes this section different is entrustment; entrustment simply means trusting of your property with someone else which can be for any reason. So to commit this offence, one must have access and control over the entrusted property only then it can be violated, disposed or converted into own use.
The expression ‘entrusted with property’ or ‘with any dominion over property’ has to have wider interpretations. It includes all such cases where goods are entrusted which means goods are handled of free consent and willingly for a competition of certain purpose but has been used otherwise, i.e. for the benefit of the entrusted person wrongfully.
The entrustment of the property creates trust, and that is only an obligation annexed to the ownership of property, which has been rising out of confidence. The basic requirement to bring the accusation of criminal breach of trust is found if the allegations made in the written report will be accepted to be true on its face value.
The offence is non-cognizable, bailable and triable by a judicial magistrate of the first class.
Criminal breach of trust can only be committed if the property is of someone else and not the accused and is also not such property from where the accused is having a beneficial interest. In a case of pledge, the goods pledged is of some other person kept in trust of the person to whom it is pledged. 
There is no limitation of section 405 for its application to Movable or immovable property which was clarified in the case of R.K. Dalmia v. Delhi Administration (1962 AIR 1821), which used the word “property” in a wider scene as there is no good reason to restrict the meaning of the word.
The court, in the case of Milan Anandan v State of U. P, laid down the essential ingredients of the offence of criminal breach of trust.
- The Accused must have control over the property
- Dishonest misappropriate or convert the property to his own use
- Dishonestly disposing of the property in violation of any direction of law or legal contract.
- Jaswantlal v State, in this case, the state prima facie sold cement only on the condition that it will be used for the purpose of construction work only. Some portion of cement received was diverted towards a godown. The court held that this amounts to criminal breach of trust. It further helps define the word entrustment as when a person is entitled to hold a property, whereas the owner still remains the same to whom the property belongs.
- Sohan Lal v Emperor, this is a case of dishonest misappropriation of property for the own use, Dishonesty is defined in Section 24 and 23 as intentional causing of wrongful gain or loss to the other person. The court dishonestly as the misappropriation must be done dishonestly.
- In the case of State of UP v Babu Ram, the accused is a police constable, when he went for investigation to a village, he found a person running hurriedly to the field, and searched him and found him with a bund of currency notes which was ceased by the police officer and later returned but Rs. 250 was less. So, the accused taking money amounts to trust and returning less money amounts to a breach of trust and thus liable to be punished.
- Tempton Jahangir Frazer v Ranchhoddas Khimji Asher and ors.: In this case, the learned magistrate gave a clarification that Section 405 and Section 406 only referred to movable property, but immovable property cannot be brought within the purview of Section 405. The complainant was not able to prove the entrustment of property within Section 405. It can be clearly inferred from the wording of section 405, which is similar to Section 403 and includes only movable property. The court came to the conclusion that immovable property does not fall under the definition and under the word ‘properly’ mentioned in the section.
- K. Dalmia v Delhi Administration The word property was to be interpreted in a wider sense. It held that whether an offence has been committed under this act will be decisive based on the fact of how the word property has been interpreted.
- In the case of Mohd. Adil v PP, here the accused was a headmaster who was charged with dishonestly deducting the salary of teachers for a society fund, but no payment was made. In this case, the court held the headmaster liable for criminal breach of trust.
The offence of criminal breach of trust is punished under Section 406 of IPC. The punishment is imprisonment of either for a term which may extend to three years or punished with fine or with both.
For an offence to be called a criminal breach of trust, three essential elements need to be present. The definition and interpretation of the word property stand the most crucial aspect. Entrustment of the property would mean dishonestly violating the terms of the obligation for which it is endowed.
 Section 405 of Indian Penal Code, 1860
 Decided on 29th September 2005
 31 Ind Cas 651
 Appeal (crl.) 279-281 of 1995
 AIR 1966 Guj 166
 1963 SCR (1) 253
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