Criminal breach of trust
Section 405 of the Indian Penal Code, 1860 deals with 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 disc The Act came into force on 01 Jan 1862. Repealed by section 358 of the Bharatiya Nyaya Sanhita, 2023 (45 of 2023) with effect from 1 July 2024, but conduct before that date is still charged, tried and appealed under it.
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 (19 of 1952) or not] who deducts the employees' 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 (34 of 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 Calcutta, 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 the last illustration, 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, thought 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.
Section 405, The Indian Penal Code, 1860 (Act 45 of 1860).
Now in the Bharatiya Nyaya Sanhita
BNS 316 Criminal breach of trust Text carried over almost unchanged 96%
Measured by comparing the text of the two provisions, not taken from an official correspondence table — there is no machine-readable one. See both texts side by side before relying on it.
Both regimes are live. The repealed enactment still governs what happened while it was in force. We never redirect one to the other.
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Indian Oil Corporation Ltd. v. NEPC India Ltd.
Court's Decision & Legal Precedent
Judgment of Main Case order-12.pdf 2006-07-20 DATE VERIFIED. Crl A 834/2002. Sema/Raveendran. Criminal breach of trust s.405: hypothecation of goods does not constitute 'entrustment'; a civil dispute should not be given a criminal colour, but a civil remedy does not bar prosecution if the ingredients exist. Do not remap BNS 316 (already filled).
On this section: Hypothecation is not 'entrustment' under s.405; criminal breach of trust is not made out merely because a civil hypothecation dispute exists (IOC v. NEPC).
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Nevada Properties Pvt. Ltd. through Its Director LTD vs The State of Maharashtra Home Department S. H. O
Court's Decision & Legal Precedent
The expression 'any property' appearing in Section 102(1) of the Code of Criminal Procedure, 1973 does not include immovable property. A police officer does not have the power to attach, seize, and seal an immovable property under Section 102 of the Code. The word 'seize' in Section 102 means actual taking of possession which cannot be done with immovable property without dispossessing the occupant, which power is not conferred by Section 102. Immovable property disputes must be adjudicated by Civil Courts or through specialized statutory procedures like the Criminal Law Amendment Ordinance 1944 or Chapter VIIA of the Code. However, police may seize documents or papers of title relating to immovable property as this is distinct from seizure of the immovable property itself.
On this section: Various offences under IPC cited in context of property-related crimes and the application of Section 102 to such investigations.
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Thermax Ltd. vs K. M. Johny
Court's Decision & Legal Precedent
A dispute arising purely from contractual obligations, even when it results in financial loss to the claimant, cannot be converted into a criminal offense under Sections 405, 406 or 420 IPC without establishing the essential ingredient of dishonest intention at the inception of the transaction. The appropriate remedy for breach of contract is a civil suit for damages, not criminal prosecution. When a complainant has previously filed identical complaints with police authorities which were investigated and closed as civil in nature, and thereafter files another complaint before a Magistrate suppressing such material facts and seeking criminal investigation, such action constitutes abuse of process of law. In the absence of specific statutory provision imposing vicarious liability on company directors and managers, they cannot be prosecuted under IPC sections for acts of the company. Section 34 IPC requires prior concert or meeting of minds with prearranged plan, which must be evident from the complaint itself.
On this section: Criminal breach of trust - requires that person be entrusted with property and dishonestly misappropriate it. Court held that mere non-payment of contractual obligation does not constitute breach of trust.
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N. Raghavender vs State of Andhra Pradesh Rep. by Cbi Cbi
Court's Decision & Legal Precedent
Suspicion, however strong, cannot substitute for conclusive proof in criminal convictions. The prosecution must prove its case beyond reasonable doubt by producing best evidence. The non-examination of a key witness who is the best person to clarify disputed facts is fatal to the prosecution case. Mere departmental misconduct, even if gross, does not constitute criminal breach of trust, cheating, or falsification of accounts unless the essential ingredients of these offences are proved beyond reasonable doubt. The absence of financial loss to the bank and the absence of any complaint from the affected party are material factors in determining criminal liability. Once entrustment of property is established, the burden shifts to the accused to prove that the property was dealt with in a legally and contractually acceptable manner, but this burden must be discharged in the context of the prosecution's failure to produce best evidence.
On this section: Defines criminal breach of trust; requires proof of dishonest misappropriation or conversion of entrusted property; establishes that mere retention without misappropriation does not constitute criminal breach of trust
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Internl. Adv. Res. Cen. for P. M. & N. M. vs Nimra Cerglass (p) Ltd.
Court's Decision & Legal Precedent
For an offence of cheating to be constituted under Section 420 IPC, the essential ingredients are: (i) making of a false representation; (ii) knowledge by the accused that representation is false; (iii) making the representation in order to deceive; and (iv) mens rea of dishonest inducement. Critically, the dishonest intention must exist at the time of making the inducement, not from subsequent failure to perform. A mere breach of contract, even if causing substantial financial loss, cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is demonstrated at the beginning of the transaction. When a technology transfer agreement explicitly provides for experimental development with contingency provisions for performance guarantee tests and liquidated damages, parties have contemplated possibility of failure to achieve specifications, negating the inference of dishonest intention at inception.
On this section: Criminal breach of trust - originally charged in complaint but investigating officer concluded no offence was made out
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Dalip Kaur vs Jagnar Singh
Court's Decision & Legal Precedent
An offence of cheating is constituted only if the accused had fraudulent or dishonest intention at the time of making the promise; a pure and simple breach of contract does not constitute a criminal offence.
On this section: Definition of criminal breach of trust.
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State of Punjab vs Pritam Chand
Court's Decision & Legal Precedent
The mere existence of a contractual relationship and breach thereof, or the availability of civil remedies through arbitration, does not preclude criminal prosecution for breach of trust under Section 406 IPC. When facts allegedly constitute criminal breach of trust involving dishonest misappropriation of entrusted property, courts must apply the statutory ingredients of Section 406 and not summarily dismiss on the basis of contractual characterization. Where two reasonable views exist regarding the criminal or civil nature of allegations, appellate courts must remit for fresh substantive consideration rather than summary dismissal.
On this section: Definition of criminal breach of trust - establishes the essential ingredients: entrusting with property, dishonest misappropriation/conversion, or violation of direction of law or legal contract regarding discharge of trust.
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Kapil Jangid vs State Of Rajasthan
Court's Decision & Legal Precedent
A mere breach of contract in commercial transactions, even involving international trade and complex payment mechanisms like Bill of Lading adjustments, does not constitute the criminal offence of cheating under Section 420 IPC or criminal breach of trust under Section 406 IPC unless the prosecution proves that the accused had fraudulent or dishonest intention at the time of making the promise. Where parties have a long-standing business relationship, goods are delivered and paid for, and the disputed payment adjustment is communicated through email correspondence to which the complainant responds, the absence of fraudulent intention is evident. In such cases, the High Court should exercise its inherent powers under Section 482 CrPC to quash criminal proceedings that are essentially civil in nature and constitute an abuse of the process of court.
On this section: Definition of criminal breach of trust - requires entrustment of property and dishonest misappropriation in violation of law or legal contract
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… of this Court under Section 482 of the Code of Criminal Procedure, 1973 (for short 'the Cr.P.C.') for quashing Private Complaint Case No.43 of 2018 (for short 'the complaint') pending before the learned Judicial Magistrate, First Class, Gangtok, East Sikkim (for short 'the learned Magistrate') for the offences under Sections 405, 420 read with 120 B, 441 read with 120 B of the Indian Penal Code, 1860 (for short 'the IPC') and also for quashing the warrants against the petitioners. 2. The petition was initially filed by Mohammed Yusufuddin Ahmed (petitioner no.1) and Ifroze Faizia Ahmed (petitioner …
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… Learned counsel also submitted that, admittedly, even the employees' contributions deducted from their wages has also admittedly not been deposited and, therefore, according to Explanations 1 and 2, added to Section 405, Indian Penal Code, the same amounts to criminal breach of trust. 14. No reply has been filed on behalf of respondent No. 1, namely, Hope Textile Ltd. nor has any one appeared on their behalf at the hearing of this petition. 15. Thus, after hearing learned counsel and after going through the record as also the …
Questions about Section 405
What have the courts held on Section 405 of the Indian Penal Code?
Indian Oil Corporation Ltd. v. NEPC India Ltd. (20 Jul 2006) is the leading judgment on this section among those set out below: Hypothecation is not 'entrustment' under s.405; criminal breach of trust is not made out merely because a civil hypothecation dispute exists (IOC v. NEPC). Another 7 judgments on this section are set out below, 7 of them from the Supreme Court. They run from 2006 to 2024.
How do I find court cases under Section 405 of the Indian Penal Code?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: IPC 405, section 405 IPC, section 405 of the Indian Penal Code. People searching for it also type ipc 405 and 406 and ipc 405 in bns. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 8 reported judgments on this section are set out on this page, beginning with Indian Oil Corporation Ltd. v. NEPC India Ltd. (20 Jul 2006).
What should I read with Section 405 of the Indian Penal Code, and has it changed?
Its own text turns on Employees Provident Funds and Miscellaneous Provisions Act 17, so none of them can safely be read on its own. 4 other provisions in this corpus refer back to it. For anything done on or after 1 July 2024 the provision to read is BNS 316 (Criminal breach of trust), which replaced it; conduct before that date is still charged, tried and appealed under this section.
When did Section 405 of the Indian Penal Code come into force?
Section 405 of the Indian Penal Code, cited as IPC 405, came into force on 01 Jan 1862, having been enacted on 06 Oct 1860. It is no longer in force.
Other sections of this Act
- 499. Defamation1512 words
- 464. Making a false document1223 words
- 300. Murder1172 words
- 378. Theft980 words
- 108. Abettor745 words
- 403. Dishonest misappropriation of property727 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Recovered from the consolidated text published by India Code (item 7b7d4fe6-206b-4e33-81f1-b98b018acaf6). This page is not a substitute for legal advice.