IPC Section 406 lays down the punishment for Criminal breach of trust which is defined in section 405 of the IPC. The section reads as follows: “Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.”
The following are essential ingredients of the offence of criminal breach of trust under Sec. 405:
- Entrusting any person with property or with any dominion over property;
- The person entrusted:
- Dishonestly misappropriates or converts to his own use that property; or
- Dishonestly uses or disposes of that property or wilfully suffers any person or wilfully suffers any other person so to do in violation
- Of any direction of law prescribing the mode in which such trust is to be discharged, or
- Of any legal contract made touching the discharge of such trust.
The ownership of beneficial interest in the property in respect of which criminal breach of trust is alleged to have been committed must be in some person other than the accused and the latter must hold it on account of some person or in some way for his benefit.
The ownership of beneficial interest in the property in respect of which criminal breach of trust is committed, must be in some person other than the accused and the latter must hold it on account of some person or in some way for his benefit. Section 405 extends to entrustment of all kinds – whether to clerks, servants, business persons or other persons, provided they are holding a position of trust. Entrustment need not be express, it may be implied.
In order to constitute an offence, it is not enough to establish that the money has not been accounted for or mismanaged. It has to be established that the accused has dishonestly put the property to his own use or to some unauthorised use. Dishonest intention to misappropriate is a crucial fact to be proved to bring home the charge of criminal breach of trust. Negligence is not ‘dishonestly keeping the property in possession.
The offence of breach of trust under Section 406 is cognizable, and warrant should, ordinarily, issue in the first instance. It is not bailable. It is only compoundable with permission of Court 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.