BNS Section 316

Section 316 of the Bharatiya Nyaya Sanhita (BNS) deals with Criminal Breach of Trust.

(1) Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits “criminal breach of trust”.

Explanation 1
A person, being an employer of an establishment whether exempted under section 17 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 or not who deducts the employee’s contribution from the wages payable to the employee for credit to a Provident Fund or Family Pension Fund established by any law for the time being in force, shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said law, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.

Explanation 2
A person, being an employer, who deducts the employees’ contribution from the wages payable to the employee for credit to the Employees’ State Insurance Fund held and administered by the Employees’ State Insurance Corporation established under the Employees’ State Insurance Act, 1948 shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said Act, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.

Illustrations
 

(a) A, being executor to the will of a deceased person, dishonestly disobeys the law which directs him to divide the effects according to the will, and appropriates them to his own use. A has committed criminal breach of trust.

(b) A is a warehouse-keeper Z going on a journey, entrusts his furniture to A, under a contract that it shall be returned on payment of a stipulated sum for warehouse room. A dishonestly sells the goods. A has committed criminal breach of trust.

(c) A, residing in Kolkata, is agent for Z, residing at Delhi. There is an express or implied contract between A and Z, that all sums remitted by Z to A shall be invested by A, according to Z’s direction. Z remits a lakh of rupees to A, with directions to A to invest the same in Company’s paper. A dishonestly disobeys the directions and employs the money in his own business. A has committed criminal breach of trust.

(d) But if A, in illustration (c), not dishonestly but in good faith, believing that it will be more for Z’s advantage to hold shares in the Bank of Bengal, disobeys Z’s directions, and buys shares in the Bank of Bengal, for Z, instead of buying Company’s paper, here, though Z should suffer loss, and should be entitled to bring a civil action against A, on account of that loss, yet A, not having acted dishonestly, has not committed criminal breach of trust.

(e) A, a revenue-officer, is entrusted with public money and is either directed by law, or bound by a contract, express or implied, with the Government, to pay into a certain treasury all the public money which he holds. A dishonestly appropriates the money. A has committed criminal breach of trust.

(f) A, a carrier, is entrusted by Z with property to be carried by land or by water. A dishonestly misappropriates the property. A has committed criminal breach of trust.

(2) Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to five years, or with fine, or with both.

(3) Whoever, being entrusted with property as a carrier, wharfinger or warehousekeeper, commits criminal breach of trust in respect of such property, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

(4) Whoever, being a clerk or servant or employed as a clerk or servant, and being in any manner entrusted in such capacity with property, or with any dominion over property, commits criminal breach of trust in respect of that property, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

(5) Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.

Example:
Rakesh, being executor to the Will of his friend Vijay, dishonestly disobeys the law which directs him to divide the properties and monies to Vijay’s family members according to the Will, and appropriates them to his own use. A has committed criminal breach of trust.

Key Points:
Criminal Breach of Trust:
The offense of criminal breach of trust occurs when a person who is entrusted with property or given control over property:
Dishonestly misappropriates or converts the property for personal use,
Dishonestly disposes of the property in violation of laws or legal agreements related to that trust, or
Allows another person to dishonestly use or dispose of the property in violation of the trust.

Entrustment of Property:
Entrustment refers to the act of giving someone responsibility or control over property, either directly or indirectly. This trust can be:
Explicit (specifically mentioned in an agreement or contract), or
Implied (based on the nature of the relationship or conduct).
The property may include both movable (goods, money, etc.) and immovable (land, buildings) assets.

Dishonest Misappropriation or Conversion:
Dishonestly misappropriating property means using the property for one's own benefit, even though it was entrusted for a specific purpose.
Conversion involves changing the use of the property in such a way that it benefits the offender, in violation of the trust.

Violation of Law or Legal Contract:
A breach occurs when the entrusted individual uses or disposes of the property in violation of:
Directions of law that prescribe how the trust should be discharged, or
The terms of a legal contract, whether express (written or spoken agreement) or implied (based on the circumstances or conduct).
The offense may also occur when the person allows someone else to breach the trust in a similar manner.

Dishonest Disposal of Property:
The offense includes not just misappropriating the property for personal use but also disposing of the property in a way that contradicts the terms of the trust or legal agreement.
Disposal could mean selling, giving away, or otherwise transferring ownership of the property without authorization.

Mens Rea (Dishonest Intent):
The key element in this offense is the presence of dishonest intent or mens rea. The individual must act with the intention of gaining unlawfully or causing loss to the person who entrusted them with the property.
Dishonesty is central to proving a criminal breach of trust. The person must have known or intended that their actions would violate the trust.

Legal Contracts:
Legal contracts related to entrustment can be either:
Express contracts, where the terms and conditions are clearly stated and agreed upon by both parties, or
Implied contracts, which are not formally written but are understood based on the relationship or context.
Violating the terms of these contracts, whether express or implied, constitutes a breach of trust.

Explore the comprehensive list of all sections under the Bharatiya Nyaya Sanhita (BNS). Our detailed guide provides a complete overview of each section to help you understand Indian law better.