IPC Section 406: Criminal Breach of Trust Explained

To understand Section 406 of IPC, you must first know what Section 405 is. 

Let’s understand it with an example!

Imagine you lent your house in Shimla to your friend with a lot of trust. Later, you find out he is using your property to sell drugs, while you are the owner of this property. Your friend broke your trust and was indulged in criminal activities.  

This is known as a “Criminal Breach of Trust”, which comes under Section 405 of IPC.  

While Section 405 defines the offense, it’s Section 406 that gives it teeth by establishing the consequences. IPC Section 406 specifically outlines the “punishments for criminal breach of trust”. However, under Bharatiya Nyaya Sanhita 2023, it is now known as Section 316(2). 

Let’s dive deep to know more about IPC Section 406! 

What is Section 406 of IPC? 

IPC Section 406, as mentioned in Chapter XVII  

“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.” 

In simpler terms, Section 406 of the IPC ensures that the responsibility for handling important assets is not exploited for personal gain. If someone is found guilty of misusing or taking property that was entrusted to them, the law says they can be punished. The punishment depends on the severity of the offense, but the maximum jail term is three years. 

Criminal Breach of Trust Under IPC 405 

In simple terms, a criminal breach of trust happens when someone is given control over property or valuable things, like money or goods, and they misuse it for their own benefit or take it without permission of the owner.  👉 Need legal advice on matters related to criminal breach of trust? Consult an experienced lawyer today! 

Key Elements of Criminal Breach of Interest

1. Entrustment: A criminal breach of trust occurs when the accused is given control over someone else’s property with the responsibility to manage or use it as agreed.  It is similar to being entrusted with something valuable and being expected to take care of it. 

2. Breach of Trust: Breach of trust happens when the accused misuses or takes the property entrusted to themselves, going against the purpose for which it was given. For example, spending money that was meant for someone else or misusing resources. 

3. Dishonest Intent: Dishonest intent means the accused acted with the purpose of causing a wrongful loss to someone or gaining something for themselves. E.g., - Employer-Employee, Trustee-Beneficiary and Contractual Relationships 

Legal Procedure in IPC Section 406 Cases

1. First Information Report (FIR)

The legal process begins with filing a First Information Report (FIR) under Section 154 of the Criminal Procedure Code, which has now become Section –173 of Bharatiya Nagarik Suraksha Sanhita, (BNSS) 2023.  

It records the complaint of a serious offense, prompting the police to investigate. 

Therefore, the FIR is important as it provides the basis for further legal action. 

2. Police Investigation and Collection of Evidence

After the FIR is filed, the police start the investigation process. They gather evidence, question witnesses, and may take property or make arrests, as allowed by the law under Section 156 of the CrPC (now Section 175 of the Bharatiya Nagarik Suraksha Sanhita, 2023). 

The aim is to establish the elements of the offense and collect enough evidence to proceed with the case. 

3. Filing of Chargesheet in Court 

After the process of evidence collection is done, the police file a chargesheet under Section 173 of the CrPC (now Section –193 of BNSS).  

The chargesheet lists the charges and the evidence against the accused and other associated people. But if the evidence isn't strong enough, the police may file a closure report, meaning they end the case without pressing charges. 

4. Role of Police and Courts

Police play a crucial role in collecting evidence and investigating the case impartially.  

Once the charge sheet is filed, after that the court analyses all the evidence, and conducts a trial and determines the case as per the law. 

5. Jurisdiction and Timelines

The location of the crime determines the jurisdiction of the court handling the case. Also, following the right time limits is important to make sure the legal process is fair and works properly, because delays can mess up the investigation and affect the trial. 

6. Penalties

• Imprisonment: Up to three years, or longer in aggravated cases. (Up to 5 years imprisonment, or fine, or both and up to 7 years imprisonment and fine in case of Clerk or servant and in case of public servant, banker, merchant, broker, attorney, or agent – Up to 10 years' imprisonment or life imprisonment, and fine.) 
• Fine: Monetary penalty, either stand alone or alongside imprisonment. 
• In severe cases, courts may impose both imprisonment and fines. 

Factors Influencing Severity: 

• The value of the misappropriated property, 
• The relationship between the complainant and the accused. 
• The intent and circumstances of the breach. 

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Legal Defenses Under IPC Section 406

• Absence of Entrustment or Dominion: The accused may argue that there was no entrustment of property or dominion over it, which is a necessary element to establish the offense under Section 406 of the IPC. 
• Lack of Dishonest Intention: The accused may argue that they were never given control over the property or that they lacked dishonest intentions. The offense of criminal breach of trust under Section 406 cannot be established. 

Legal Remedies Under IPC Section 406 

• The person accused of the crime might argue that they were never given control over the property or that they didn’t have any dishonest intentions. Unless this is proven wrong, they can't be charged under Section 406 of the IPC.   
• The accused might also claim there’s a misunderstanding about who owns the property or that the property wasn’t actually given to them to look after, which would mean the charge doesn’t apply under Section 405 of the IPC.   
• The person accused can also argue that the prosecution hasn't provided enough solid proof to prove the crime happened. If there’s not enough strong evidence, the charges under Section 406 or 409 of the IPC may not stand.   
• If someone is a victim of criminal breach of trust, they can file a complaint under Section 406 of the IPC. In the complaint, the victim can list all the claims of the accused misusing or dishonestly taking the property that was entrusted to them. 

Landmark Judgments Related to IPC 406 

Several landmark judgments have influenced the interpretation of Section 406: 

1. State of Gujarat v. Jaswantlal Nathalal, 1968 AIR 700 

The court clarified that breaking a contract or misusing the property does not necessarily constitute a criminal breach of trust. To prove the crime, it must be clear that the person had dishonest intentions. 

2. Chelloor Mankkal Narayan Ittiravi vs State of Travancore-Cochin, 1953 AIR 478 

The Courts ruled that the public servants, should be charged with criminal breach of trust under IPC Section 409 for misappropriating Rs. 23,100 entrusted to them, instead of depositing it in the company’s accounts. 

Differences Between IPC 406 and Section 316 (BNS) 

Conclusion

Criminal breach of trust is one of the most useful yet misused sections of the Indian Penal Code, 1860. So, people tend to fall into the clutches of being victim of criminal breach of trust and thus feel helpless. If you are a victim of Criminal Breach of Trust, this guide helps you understand the concept and explore legal remedies available through DigiLawyer.