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About 405/406 IPC

Section 405/406 of the Indian Penal Code (IPC) deals with the punishment for criminal breach of trust,

In the Bharatiya Nyaya Sanhita (BNS) 2023, the equivalent of IPC 406 is Section 316 which pertains to the offense of "criminal breach of trust":

Nature of offense:

The offense of criminal breach of trust under Section 406 is cognizable.

 The offense of criminal breach of trust under Section 406 is non bailable.

The offense of criminal breach of trust under Section 406 is only compoundable with the permission of the Court.

The punishment for criminal breach of trust is imprisonment for up to three years, a fine, or both.

Definition:

Section 405: Criminal breach of trust

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”.

A criminal breach of trust is when someone fraudulently takes another person's property that has been entrusted to them or lawfully come into their possession.

Relationship of trust

To bring a case under this section, it must be established that there was a relationship of trust and confidence.

Word "appropriate"

The word "appropriate" means to set apart or assign the property to oneself or to another to the exclusion of the owner.

 “The offence of Criminal breach of trust within the meaning of section 406 of the Indian Penal Code, may be broadly defined as the fraudulent appropriation of another’s property by a person to whom it has been entrusted or into whose hands it has lawfully come. To bring a case within the mischief of the section it must be established that there was a relationship of trust and confidence. If no fiduciary relationship is set up by the transaction under which the offender obtained the property and if the relationship between the complainant and accused with reference to the property is that of debtor and creditor etc., a charge under this section cannot be brought home to the accused.”

JAGE RAM vs state ,Criminal Appeal No. 320 of 1950 volume 4 page 286 Punjab series.

The Hon'ble Supreme Court in the case of Rajukrishna Shedbalkar vs. The State of Karnataka and Anr., while analysing Sections 405 and 406 of the IPC observed that no punishment under Section 406 of the Act can be given unless all essentials of Section 405 of the Act are fulfilled.

Key elements to prove a charge under Section 406 IPC:

Entrustment of property:

The complainant must demonstrate that the accused was given possession of the property with the understanding that they would hold it in trust for the owner.

in this case, it was observed that there was no evidence of the complainant demanding the return of stridhan from the accused, which is a critical element for establishing the offense.

Nand Kishore Pandey S/o Shri P. N. Pandey VS State of Chhattisgarh - Chhattisgarh, Order delivered on 07.06.2021, Cr.M.P.No.1075 of 2019.

Dishonest misappropriation:

The accused must have used the entrusted property for their own benefit, contrary to the terms of the trust, with a dishonest intention.

Dishonest Intention:

As per Section 24, IPC, dishonest intention means doing an act with the intention of causing wrongful gain to one person or wrongful loss to another person.

Lack of Entrustment:

In cases where there was no clear evidence of entrustment or misappropriation, courts have quashed charges under Section 406 IPC.

In this matter, the court highlighted that without specific allegations of entrustment, the question of misappropriation does not arise

Ritu Sethi VS State of NCT of Delhi - Delhi Neutral Citation Number: 2023/DHC/000086

Demand for return:

The complainant must have demanded the return of the property, which the accused refused to comply with.

A mere notice from the police does not constitute a valid demand from the complainant. The demand must come directly from the complainant to the accused.

Nand Kishore Pandey S/o Shri P. N. Pandey VS State of Chhattisgarh - Chhattisgarh Cr.M.P.No.1075 of 2019, Order delivered on 07.06.2021.

Demand and Non-Return:

The Supreme Court has held that the offense under Section 406 IPC is made out from the , on which the articles were not returned after a valid demand was made.

Vivek Mathur VS State of U. P. - Allahabad APPLICATION U/S 482 No. - 29682 of 2017 Delivered on13.04.2022.

Territorial Jurisdiction:

The court must have jurisdiction over the location where the stridhan was to be returned. If the complainant has moved to a different location and the demand for return was not made in the jurisdiction of the court, it may lead to quashing of the proceedings.

Ashok Kumar Rathi S/o Late Mulchand Rathi VS State of Assam - Gauhati, Case No. : Crl.Pet./1385/2019, Date of Judgment 10.10.2023.

Nature of Offence:

The offence under Section 406 IPC is considered a continuing offence. This means that if the accused continues to withhold the stridhan after a demand has been made, the offense persists until the property is returned.

Renu VS State of Haryana - Punjab and Haryana 1991CRILJ2049

 

KO Antony v State of Kerala & Anr. CRL.MC NO. 2126 OF 2022,decided on 7/08/2023.

that to attract the offense under Section 406 of the IPC, in addition to the entrustment of the property, it needs to be shown that the accused had misappropriated or converted the same to his own use.

Pooran Singh vs State Of Delhi, BAIL APPLN. 2029/2018, Date of decision: 10th DECEMBER, 2021

In another case before Delhi high court, Mere Recovery Of Stridhan Can't Be Sole Ground For Arresting A Person For Offences U/S 498A, 406 IPC.

The IPC prescribes graded punishments based on the potential harm and the level of trust associated with each role as given below:

Section 407, IPC – Criminal breach of trust by carrier, etc.

Whoever, being entrusted with property as a carrier, wharfinger or warehouse-keeper, 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.

Section 408, IPC – Criminal breach of trust by clerk or servant.

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.

Section 409, IPC – Criminal breach of trust by public servant, or by banker, merchant, or agent.

Whoever, being in any manner entrusted with property, or with any dominion over the 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.

Sanjeev Chaddha v. State of UP Neutral Citation: 2024:AHC:145945.

in this matter Allahabad high court, noted that for Section 406 Cr.P.C., the requirement for the commission of an offence of criminal breach of trust is that there must be entrustment with property, which was dishonestly misappropriated or converted to his use and it must be in violation of any direction of law or any legal contract express or implied. The Court further noted that the proceedings appeared to be initiated by the complainant only to put pressure on his elder brother to negotiate since there is a Will where the complainant is not a beneficiary. The Court said that not only the ingredients of Section 406 I.P.C. are not made out but proceedings are also creatures of malafides and were initiated only to harass the applicant by giving the cloak of a criminal case to a dispute which was essentially of a civil nature.

Premjit Singh Atwal vs The State Of Jharkhand, Cr.M.P. No. 1643 of 2018 decided on 16 August, 2024.

In this Matter, hon’ble high court stated, “From the very beginning, there is no intention of cheating and that is why the learned court has not taken cognizance under section 420 I.P.C. Admittedly, the transaction was with regard to business terms. Mere breach of contract does not constitute an offense under section 405 I.P.C. without there being an element of entrustment.”

Satishchandra Ratanlal Shah v. State of Gujarat and Others AIR 2019 SCC 1538,

in this matter, the Hon’ble supreme court noted that a criminal charge under Section 405 IPC cannot be sustained if the alleged breach is merely a contractual matter. The court clarified that the transaction in question was a business agreement, and the complainant’s allegations pertained to a contractual dispute rather than criminal intent.

Naresh Kumar & Anr. v. The State Of Karnataka & Anr 2024 INSC 196

In this case, the Supreme Court observed that the high court should not hesitate to quash criminal proceedings that are essentially civil in nature.

Paramjeet Batra v. State of Uttarakhand criminal appeal no 2069/2012 decided on 14/12/2012,

In this case, the Supreme Court emphasized that the high court should be cautious when exercising its jurisdiction under Section 482 of the Code. The court also held that the high court should quash criminal proceedings if a civil remedy is available and has been adopted.

Gopalkrishna Pillai Vs. State of Kerala 2016 (2) KHC 338

In this matter high court observed, that it is admitted that the amount collected had been subsequently remitted by the employer. Since the amount collected by the employer from the employees would not amount to entrustment within the meaning of Section 405 of IPC, no purpose would be served in continuing the prosecution against the revision petitioner under Section 406 of the Code. In the said circumstances, it is only just and proper to discharge the revision petitioner, dropping the further proceedings against him.

Conclusion:

It is pertinent to mention here that the Hon’ble Supreme court and various high court of our country has made it clear that there is clear distinction between civil breach of trust and criminal breach of trust apart from it, hon’ble court has shown the essential of offense 405/406 ipc (316 BNS).

By Ved Prakash Saxena

Advocate Allahabad high Court,