BY – Madhulika Agrawal

Criminal breach of Trust

Under Indian Penal code 1860 Criminal breach of trust has been mentioned and defined in section 405 which says that:

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”.

Criminal Misappropriation

Under Indian Penal code 1860 Criminal Misappropriation has been mentioned and defined in section 403 which says that:

Whoever dishonestly mis-appropriates or converts to his own use any movable property, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both.

Essentials of criminal breach of trust

  1. The person charged with criminal misappropriation must be entrusted with the property or with dominion over it,
  2. The person so entrusted must use or works that property, or;
  3. The accused must dishonestly use or works or sells of that property or intentionally suffer any other person to do so in breach,
  4. of any order of law mentioning the mode in which such trust is to be discharged, or;
  5.  Of any legal contract made in accordance with the disposal of such trust.

Essentials of criminal misappropriation

  1. The property must be of another human being
  2. Dishonest Intention
  3. Alteration of property
  4. Acquirer of goods

Criminal breach of trust vs. Criminal misappropriation

Section under Indian Penal Code 1860  Section-405Section -403
Ownershipthe property comes into the ownership of the accused due to the entrustment by the owner of the offender  the property comes into the ownership of the accused by dishonest misappropriation without knowledge of the owner.
BondThere is a legitimate bond between the accused and owner relating to the property.  there is no legitimate bond between the accused and owner of the property
Creation of the propertyThe property can be movable or immovable in nature   The property is movable in nature.
EmbezzlementThe property is misappropriated for one’s own personal use.The property is dishonestly misappropriated by the accused for his own use or purpose.  
Punishmentimprisonment of a term which may extent to 2 years or with fine, or with bothimprisonment of either a term which may extent to 2 years or with fine, or with both  
Triable in which court and its classificationNon-compoundable and triable by the Magistrate of the First Class.  Compoundable with permission of Court and triable by any Magistrate.
Illustrations      D is a warehouse-keeper. P going on a journey entrusts his furniture to A, under a contract that it shall be returned on payment of a set down sum for warehouse room. D dishonestly sells the goods. D has committed criminal breach of trust.          Z takes property belonging to A out of A doe’s possession, in good faith; believe, at any time when he takes it, that the property belongs to him. Z is not guilty of theft; but if Z, after discovering his mistake, dishonestly appropriates the property to his own use, he is guilty of an offence under this section.    
Case lawsSection 405 IPC requires doing of anything with regards to property which would indicate either misappropriation or changing or its use or disposal in violation of any legal contract, express or implied. A mere matter of dispute of civil nature will not attract the provisions of this section.   [Mohammed Sulaiman vs. Mohammed Ayub, AIR 1965 SC 1319]   In the case of State of Gujarat v. Jaswantlal Nathalal, The offender was given certain bags of cement by the government on the condition for a certain performance of a construction work. However, he transfers some of the portion of cement to distinctive area of subject and the contractor did not use cement for the authorised purpose alone. The Supreme Court held that they break the entrustment of contract between them.It has been held that the word ‘dishonestly’ and ‘misappropriate’ are important ingredients of a crime under section 403. Any matter being about the recovery of money is purely of civil concept. Hence a criminal complaint regarding such a matter is not maintainable,  U. Dhar vs. State of Jharkhand, AIR 2003 SC 974.   The words ’converts to his own use’ importantly connote the use or dealing with the property in derogation of the rights of the owner;  Ramaswami Nadar vs. State of Madras, AIR 1958 SC 56.  


It is concluded that the Criminal Misappropriation and Criminal Breach of Trust are very different from each other. Criminal Breach of Trust includes Criminal Misappropriation but the reverse is not always true. When we speak about these mentioned crimes, they are often in front of the eyes where the criminals take advantage of the lack of legal knowledge amongst the common man who doesn’t know the comprehensions of these sections, prima facie. Hence, there should be awareness camps and recognition especially for the poor and people having no knowledge and for those who don’t understand in order to make the human beings for our country aware about the laws persuading in the country.

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