Punishment for criminal breach of trust
Section 406 of the Indian Penal Code, 1860 deals with punishment for criminal breach of trust. 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 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 Repealed by section 358 of the Bharatiya Nyaya Sanhita, 2023 (45 of 2023) with effect from 1 July 2024, but conduct before that date is still charged, tried and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 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.
Section 406, The Indian Penal Code, 1860 (Act 45 of 1860).
Now in the Bharatiya Nyaya Sanhita
BNS 316 Criminal breach of trust Close, with changes 83%
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 The repealed enactment still governs what happened while it was in force.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.
Referred to by 2
- Rajasthan Co-operative Societies Act s. 28 Disqualification of membership etc. of committees
- Telangana Prevention of Dangerous Activities of Boot-leggers, Dacoits, Drug-Offenders, Goondas, Immoral Traffic Offenders Land-Grabbers, Spurious Seed Offenders, Insecticide Offenders, Fertiliser Offenders, Food Adulteration Offenders, Fake Document Offenders, Scheduled Commodities Offenders, Forest Offenders, Gaming Offenders, Sexual Offenders, Explosive Substances Offenders, Arms Offenders, Cyber Crime Offenders and White Collar or Financial Offenders Act s. 17
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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Delhi Race Club (1940) Ltd. v. State of Uttar Pradesh
Court's Decision & Legal Precedent
Judgement of Main Case order-3.pdf 2024-08-23 (not same-date order-4 ROP). Pardiwala/Manoj Misra, Crl A 3114/2024. Restates the distinction between criminal breach of trust (IPC 406: entrustment + dishonest misappropriation) and cheating (IPC 420: dishonest inducement at inception). The two do not ordinarily sit together on the same facts; FIR/summoning that conflates them is liable to be quashed. Map 406/420 and successors BNS 316/318.
On this section: s.406 requires entrustment plus dishonest misappropriation; it is not made out by a mere payment or contractual default, and it is not the same as cheating.
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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: Punishment for criminal breach of trust - requires proof that accused was entrusted with property or had dominion over it, and misappropriated or converted it to own use or used/disposed of it dishonestly in violation of legal contract or direction of law.
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Raja Ram Kashyap vs State of U. P.
Court's Decision & Legal Precedent
Offences under Sections 406 and 420 of the Indian Penal Code are compoundable offences, and when the authorized persons (the person to whom property hurt is caused for Section 406, and the owner of property for Section 420) wish to compound the offence with court permission under Section 320(2) of the Code of Criminal Procedure, 1973, the court shall permit such compounding and facilitate the settlement of the criminal dispute.
On this section: Criminal breach of trust - identified as a compoundable offence where the value of property does not exceed two hundred rupees, compoundable by the person to whom the property hurt is caused
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State Bank Of India vs Reserve Bank Of India
Court's Decision & Legal Precedent
The principles of natural justice, particularly the rule of audi alteram partem, must be necessarily read into the Master Directions on Frauds (specifically Clauses 8.9.4 and 8.9.5) to save the directions from the vice of arbitrariness. Since classification of a borrower's account as fraudulent entails serious civil consequences including debarment from institutional finance for five years (a form of blacklisting), statutory silence in the directions does not imply exclusion of natural justice. Lender banks must furnish borrowers with a copy of forensic audit reports and provide a reasonable opportunity to submit representations before classifying accounts as fraudulent. The banks must issue reasoned orders addressing borrower objections. This requirement is constitutionally mandated under Article 14 of the Indian Constitution and does not obstruct the six-month timeline contemplated for fraud detection and reporting.
On this section: Classification of fraud types under Master Directions on Frauds based on IPC provisions including criminal breach of trust, cheating, forgery
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Udai Shankar Awasthi vs State of U. P
Court's Decision & Legal Precedent
Where a criminal complaint is filed many years after an alleged instantaneous offence (not a continuing offence), beyond the prescribed limitation period under Section 468 CrPC, without plausible explanation for delay, by a litigant who has exhausted all civil and arbitral remedies and lost therein, and where earlier complaints on substantially identical facts have been dismissed on merits, and where material facts such as earlier dismissals have been suppressed, the complaint constitutes an abuse of the process of court and is liable to be quashed under Section 482 CrPC, regardless of the gravity of the alleged offence or the availability in law to prosecute crimes after long periods. The court must protect innocent persons from harassment by unscrupulous litigants who seek to weaponize criminal proceedings as a tool for vengeance after civil defeat.
On this section: Prescribes punishment for criminal breach of trust. Maximum punishment is 3 years imprisonment or fine or both. This was the principal offence alleged against the appellants.
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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: Punishment for criminal breach of trust - Court examined whether essential ingredients of Section 405 were made out before considering punishment section.
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Kaushik Chaterjee vs State of Haryana
Court's Decision & Legal Precedent
The question of territorial jurisdiction in criminal proceedings is a question of fact that must be established through evidence and cannot be decided at the transfer petition stage. The trial court, not the Supreme Court, is the appropriate forum to decide jurisdictional issues after evidence is led on the place of commission of the offence and other relevant factors enumerated in Sections 177 to 184 of the Code of Criminal Procedure. Therefore, transfer petitions seeking transfer on the ground of lack of territorial jurisdiction must be dismissed, leaving it open to the parties to raise and have the trial court decide the jurisdictional issue during the trial.
On this section: Offences alleged in the three FIRs including criminal breach of trust, criminal misappropriation, cheating, criminal conspiracy, forgery, and extortion. These sections define the nature of criminal offences for which territorial jurisdiction must be determined.
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Kaushik Chatterjee vs The State of Haryana
Court's Decision & Legal Precedent
Questions of territorial jurisdiction in criminal cases depend upon facts to be established by evidence and must be decided by the trial court based on the provisions of Sections 177 to 184 of the Code of Criminal Procedure. A transfer petition cannot be granted on the ground of lack of territorial jurisdiction before evidence is marshaled, as the Supreme Court cannot determine factual questions relating to the place of commission of offence or other jurisdictional factors without evidence. The trial court is the appropriate forum to consider such issues after evidence is led by the parties.
On this section: These sections define the offences of criminal breach of trust, cheating, criminal conspiracy, forgery, and extortion, which are the subject matter of the three FIRs filed against the petitioner and others
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Chirag M. Pathak vs Dollyben Kantilal Patel
Court's Decision & Legal Precedent
When multiple FIRs are registered against the same accused persons in relation to different entities (such as different cooperative societies), mere involvement of common accused persons and some overlapping allegations do not justify quashing FIRs at the investigative stage based on mechanical application of the 'identical allegations' test. Each FIR must be evaluated on the distinct factual matrix of the entity it concerns. The High Court cannot conduct detailed factual examination like an appellate court at the investigation stage; it can only quash FIRs in exceptional cases of sheer absurdity or complete lack of prima facie cognizable case. If a prima facie cognizable case is disclosed in the FIR, the Court must allow investigation to proceed to completion, after which charge-sheets can be filed and cases can be consolidated for trial if appropriate. The distinction in facts—such as different entities, different members, different properties, different buyers, different dates, different amounts, and different persons involved in alleged crimes—are sufficient to constitute separate FIRs even when common accused are involved.
On this section: Various offences alleged in the FIRs including criminal breach of trust, cheating, forgery, falsification of accounts, and criminal conspiracy; cited to establish nature of allegations made in respective FIRs.
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Punjab State Warehousing CORP vs Bhushan Chander
Court's Decision & Legal Precedent
Protection under Section 197 CrPC is not available to employees of Government companies or public undertakings (even when such undertakings are 'State' within Article 12 of Constitution) for prosecution of offences. Furthermore, offences of criminal breach of trust (Section 409), forgery (Sections 467, 468, 471) and cheating (Section 420) committed by a public servant cannot reasonably be claimed to be done in discharge of official duty; rather, the official position merely provides the opportunity for commission. Sanction under Section 197 CrPC is required only when there is a reasonable connection between the criminal act and the discharge of official duty, or when the act can be done under colour of office. Acts directly and reasonably disconnected from official duty do not attract Section 197 protection.
On this section: Criminal breach of trust - cited in State of Kerala v. V. Padmanabhan Nair regarding sanction requirement
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J. Ramesh Kamath vs Mohana Kurup
Court's Decision & Legal Precedent
Criminal charges involving misappropriation of organizational funds by office bearers in positions of fiduciary trust cannot be characterized as purely personal or civil disputes amenable to quashing under Section 482 of the Criminal Procedure Code based on settlement agreements, even when accepted by all parties including complaining members and current office bearers. The High Court must refuse to quash criminal proceedings in such cases because they involve crimes of breach of trust against the organization and society, and the timing of settlement after completion of investigation and charge-sheet filing demands that the trial court be allowed to determine guilt or innocence on evidence presented at trial. The distinction between Section 320 (compounding) and Section 482 (inherent jurisdiction) does not permit circumvention of the principles that serious offences involving breach of organizational trust and fiduciary duty are not amenable to settlement, regardless of whether all parties subsequently agree to compromise.
On this section: Criminal breach of trust by public servant or by banker, merchant, or agent - applied to charges against office bearers who misappropriated association funds while in positions of trust
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D. P Gulati, Mngr. Acct. M/s Jetking Infotra vs The State of U. P & ANR
Court's Decision & Legal Precedent
When criminal proceedings are initiated as a counter-blast or retaliatory measure to pressure a party who has filed a prior legitimate criminal complaint against the initiator, such proceedings constitute an abuse of the process of law and should be quashed at the threshold under Section 482 CrPC, particularly when the allegations appear frivolous and the sequential filing pattern demonstrates harassment rather than genuine prosecution.
On this section: Alleged offence of criminal breach of trust; cited as one of the charges from which the accused sought protection through quashing petition.
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Krishnamoorthy vs Sivakumar
Court's Decision & Legal Precedent
Non-disclosure of pending criminal cases involving heinous or serious offences, corruption, or moral turpitude by a candidate in the affidavit filed with nomination papers constitutes undue influence and corrupt practice under Section 123(2) of the Representation of People's Act, 1951, as it directly interferes with the free exercise of electoral right by depriving voters of their fundamental right to know the criminal antecedents of candidates, thereby preventing them from making informed and advised electoral choices. Once such non-disclosure is established in an election petition, the election must be declared null and void under Section 100(1)(b) of the RP Act without requiring proof that the result was materially affected.
On this section: Criminal breach of trust, charges against appellant
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Harsha Vardhan vs The Inspector of Police, EOW, Thiruvallur.
Court's Decision & Legal Precedent
The right to statutory bail under Section 187(2) of the BNSS is an absolute statutory right and legislative command. If the investigating agency fails to file a charge sheet within the prescribed period of 60 or 90 days, the court has no discretion to deny bail based on the merits of the case or gravity of the offense.
On this section: Substantive offenses of criminal breach of trust, cheating, and conspiracy for which the petitioner was arrested.
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Latika Sehgal vs Raj Sehgal
Court's Decision & Legal Precedent
In transfer applications relating to civil suits arising from matrimonial disputes, while the convenience of the wife is generally preferred, it is not an absolute rule. The court must balance the hardship and convenience of all parties involved, considering factors such as age, health, distance, and the nature of the litigation. In civil suits, the physical presence of parties is not required at every hearing, which reduces the burden of travel. When competing hardships exist and no medical evidence is provided to substantiate claims of severe health conditions, the court may dismiss the transfer application.
On this section: Criminal complaint filed by applicant No. 1 against respondent for criminal breach of trust; accused was later discharged
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Naseeb Jain @ Sonu vs State Of Haryana
Court's Decision & Legal Precedent
When a criminal revision petition is interconnected with another petition and an order has been passed in the connected petition on the same date, the petitioner may be permitted to withdraw the revision petition with liberty to raise all grounds before the Trial Court at the appropriate stage, allowing the trial court to consider all arguments in the context of the interconnected cases.
On this section: Criminal breach of trust - added charge in connected FIR
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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… Construction, which is the complainant's (respondent No.4 herein) entity, to obtain manpower. It is alleged in the subject FIR that 'YSSS' in connivance with the other accused defaulted payment to the complainant's company. The subject FIR was registered under Sections 406, 420, 323, 504, 506 and 120-B of the Indian Penal Code, 1860 (hereafter, 'the IPC') against the accused, including the appellant herein on the allegation that 'YSSS', in connivance with the other accused defaulted payment to the company to the tune of Rs.9 Crores. Pursuant to the lodgement of the FIR, the appellant …
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… However, as their relationship deteriorated, Respondent No. 02 left the matrimonial home on 09.04.2016. Subsequently, Respondent No. 02 initiated criminal proceedings against the Appellant by lodging FIR No. 578 of 2017 for offences punishable under Sections 498A and 406 of the Indian Penal Code, 1860 (hereinafter referred to as "IPC 1860"). In response, the Appellant herein pronounced a triple talaq on 25.09.2017 and moved Criminal Appeal No. 2842 of 2024 Page 2 of 43 for divorce before the office of Quzath seeking a declaration of divorce, which was eventually …
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… Petition bearing CRL.M.C. 1066/2021 under Section 482 of the Code of Criminal Procedure, 1973 ( hereinafter referred to as "Cr.PC" ), has been filed against the Order on Charge dated 29.11.2019 whereby the Charges under Section 498A read with Section 34 and Section 406 of the Indian Penal Code, 1860 ( hereinafter referred to as "IPC" ) have been framed against the Petitioner No. 1/ Mr. Pankaj Chauhan; Charges under Section 498A read with Section 34 IPC, have been framed against Petitioner No.2/Mrs. Jagriti Minhas; Charges under Section 498A read with Section 34 IPC and Section 354 …
Questions about Section 406
What have the courts held on Section 406 of the Indian Penal Code?
Delhi Race Club (1940) Ltd. v. State of Uttar Pradesh (23 Aug 2024) is the leading judgment on this section among those set out below: s.406 requires entrustment plus dishonest misappropriation; it is not made out by a mere payment or contractual default, and it is not the same as cheating. Another 15 judgments on this section are set out below, 13 of them from the Supreme Court. They run from 2009 to 2025.
How do I find court cases under Section 406 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 406, section 406 IPC, section 406 of the Indian Penal Code. People searching for it also type ipc 406 and 420 and ipc 406 in bns. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 16 reported judgments on this section are set out on this page, beginning with Delhi Race Club (1940) Ltd. v. State of Uttar Pradesh (23 Aug 2024).
What should I read with Section 406 of the Indian Penal Code, and has it changed?
2 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 406 of the Indian Penal Code come into force?
Section 406 of the Indian Penal Code, cited as IPC 406, 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.