Indian Penal Code,1860
Act No : 45
Section :
Criminal breach of trust.
405. Criminal breach of trust.--Whoever, being in any mannerentrusted 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 anydirection of law prescribing the mode in which such trust is to bedischarged, or of any legal contract, express or implied, which he hasmade touching the discharge of such trust, or wilfully suffers anyother person so to do, commits "criminal breach of trust". 1*[2*[Explanation 1].-A person, being an employer 3*[of anestablishment whether exempted under section 17 of the Employees'Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) ornot] who deducts the employees' contribution from the wages payable tothe employee for credit to a Provident Fund or Family Pension Fundestablished by any law for the time being in force, shall be deemed tohave been entrusted with the amount of the contribution so deducted byhim and if he makes default in the payment of such contribution to thesaid Fund in violation of the said law shall be deemed to havedishonestly used the amount of the said contribution in violation of adirection of law as aforesaid.] 4*[Explanation 2.-A person, being an employer, who deducts theemployees contribution from the wages payable to the employee forcredit to the Employees' State Insurance Fund held and administered bythe Employees' State Insurance Corporation established under theEmployees' State Insurance Act, 1948 (34 of 1948), shall be deemed tohave been entrusted with the amount of the contribution so deducted byhim and if he makes default in the payment of such contribution to the----------------------------------------------------------------------1. Ins. by Act 40 of 1973, s. 9 (w.e.f. 1-11-1973).2. Explanation renumbered as Explanation 1 by Act 38 of 1975, s. 9 (w.e.f. 1-9-1975).3. Ins. by Act 33 of 1988, s. 27 (w.e.f. 1-8-1988).4. Ins. by Act 38 of 1975, s. 9 (w.e.f. 1-9-1975).----------------------------------------------------------------------194said Fund in violation of the said Act, shall be deemed to havedishonestly used the amount of the said contribution in violation of adirection 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 effectsaccording to the will, and appropriates them to his own use. A hascommitted criminal breach of trust. (b) A is a warehouse-keeper, Z, going on a journey, entrusts hisfurniture to A, under a contract that it shall be returned on paymentof 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 sumsremitted 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 thesame in Company's paper. A dishonestly disobeys the directions andemploys the money in his own business. A has committed criminal breachof trust. (d) But if A, in the last illustration, not dishonestly but ingood faith, believing that it will be more for Z's advantage to holdshares in the Bank of Bengal, disobeys Z's directions, and buys sharesin 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 civilaction against A, on account of that loss, yet A, not having acteddishonestly, has not committed criminal breach of trust. (e) A, a revenue-officer, is entrusted with public money and iseither directed by law, or bound by a contract, express or implied,with the Government, to pay into a certain treasury all the publicmoney which he holds. A dishonestly appropriates the money. A hascommitted criminal breach of trust. (f) A, a carrier, is entrusted by Z with property to be carriedby land or by water. A dishonestly misappropriates the property. A hascommitted criminal breach of trust.
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