The Section 406 IPC, which was passed in 1860, serves as the foundation for India’s criminal law. Its most significant section is Section 406 of the Indian Penal Code, which deals with the crime of “criminal breach of trust.” Although this term is commonly used in news reports and legal jargon, understanding its practical applications requires a more thorough analysis of the statute, the particulars of the offense, and the related legal ramifications.
Definition of Section 406 IPC
The IPC’s Section 406 outlines the penalties for criminal breach of trust. “Anyone who commits a criminal breach of trust faces a term of imprisonment of either kind that can last up to three years, a fine, or both.”
Ingredients of Section 406 of IPC
- Entrusted: To be considered an offense under the Indian Penal Code, 1860, “entrustment” of property under Section 405 is essential. The word “entrustment,” as used in this Section, is ambiguous and encompasses a variety of meanings. Consequently, anyone holding a position under trust, including clerks, servants, company officials, agents, and others, is covered by entrustment. The Hon’ble Supreme Court ruled in Som Narth Puri v. the State of Rajasthan (1972) that the term “entrustment” is broad enough to cover all properties that are voluntarily given over for a particular reason or goal. Furthermore, as determined in the State of Madhya Pradesh v. Pramode Mategaonkar (1965) case, entrustment need not only be explicitly stated but also implied.
The Supreme Court ruled in R.K. Dalmia v. Delhi Administration (1962), a seminal case, that the definition of property under the Code is sufficiently broad in comparison to moveable property. The Hon’ble Court further noted that when discussing matters under Section 405 of the Indian Penal Code, 1860, different aspects of the term “property” should not be limited to movable property. The Hon’ble Supreme Court ruled in Shivnarayan Laxminarayan Joshi v. the State of Maharashtra (1980) that dominion refers to control over property. As a result, a company’s director who serves as a trustee or asset holder has authority over that property.
- Misappropriated: “Dishonest misappropriation” is a crucial component of criminal breach of trust. According to Section 24 of the Indian Penal Code,1860, dishonesty is defined as the deliberate doing of one person’s wrongful gain at the expense of another’s wrongful loss. Furthermore, Section 23 of the Indian Penal Code, 1860 defines the terms “wrongful gain” and “wrongful loss.” Wrongful gain is defined as money obtained through illegal means by someone who is not legally entitled to it, whereas wrongful loss is defined as money obtained illegally by someone who is legally entitled to it.
This Section’s main requirement is that the accused must dishonestly use the property for an unauthorised purpose. Section 405 of the Indian Penal Code, 1860 does not define an offense as mere mismanagement of money. Dishonest misappropriation may not always be proven in the first instance, but if it is shown that someone was given property and that person gained control of it while giving a false explanation for his failure to account for it, then misappropriation with dishonest intent can be easily conceptualised, as was decided in the 1960 case of Jai Krishna Das Manohardas Desai v. the State of Bombay.
Criminal Breach of Trust and Criminal Misappropriation
| Breach of Trust | Criminal Misappropriation |
| The Indian Penal Code, 1860’s section 405 enshrines criminal breach of trust. | The Indian Penal Code, 1860 defines criminal misappropriation in section 403. |
| In the event of a criminal breach of trust, the person to whom the property was entrusted must convert it for their use. | The term “criminal misappropriation” is more expensive than “criminal breach of trust.” In terms of criminal misappropriation, the defaulter has any kind of ownership over the property. |
| Under criminal breach of trust, there is a contractual trust which is established. Hence, a contractual relationship is created. | However, under criminal misappropriation, no contractual relationship is established. |
| Under this, the person is entrusted with property and such entrusted person dishonestly misappropriates it and converts the same for his/her use. | Under this, the offender is not entrusted with the property, however, such a person obtains possession of the property in response to an accident or causality which is later converted by him/her for personal use. |
| The punishment for criminal breach of trust under the Indian Penal Code is three years of imprisonment or with a fine or both. | The punishment for criminal misappropriation under the Indian Penal Code is two years imprisonment or a fine or both. |
Penalties for Criminal Breach of Trust
- According to Section 406 of the Indian Penal Code,1860, a person found guilty of a crime involving a criminal breach of trust faces up to three years in prison, a fine, or potentially both.
- According to the Indian Penal Code, Section 407: when a carrier, warehouse, wharfinger, etc. commits a criminal breach of trust. The accused faces a term of imprisonment that can be extended to a maximum of seven (7) years, a fine, or both.
- When a clerk or servant commits a criminal breach of trust, they can be punished with up to seven (seven) years in prison, a fine, or both. This is stated in Section 408 of the Indian Penal Code, 1860.
- As per the Indian Penal Code, 1860, Section 409, an employee of the government, banker, merchant, agent, etc. who commits a criminal breach of trust faces a life sentence, a maximum of ten (10) years in prison, a fine, or both.
Entrustment of Property under Section 406 of IPC
It usually refers to giving ownership of property to someone else. A property transfer of this kind typically does not indicate the loss of ownership or other property rights. Moreover, there must be a fiduciary relationship established to “entrust” property. Stated differently, the recipient of the property must hold a legitimate position of trust.
The most typical example is that of a married woman. The woman’s ownership of stridhan does not always automatically pass to her spouse when she moves into her in-laws’ house. It is important to remember that, as the woman’s trustees, the husband and his parents must turn over her belongings upon her request.
Conclusion
The criminal code’s Section 406 IPC describes the penalties for dishonestly misusing property that has been entrusted to someone who commits a criminal breach of trust. Criminal misappropriation is not the same as it involves a fiduciary relationship and does not have a contractual component. Depending on the seriousness of the offense and the offender’s role, penalties can vary from fines to imprisonment.
FAQ’S of Section 406 IPC
Q1. Is bailable under 406 IPC?
Ans. The 406 IPC is not a crime for which bail is allowed in India, thus the accused is not entitled to bail.
Q2. What is covered by the IPC 406 Section?
Ans. The legal ramifications and sanctions for violating the Indian Penal Code’s definition of a criminal breach of trust are outlined in the IPC 406 Section.
Q3. What constitutes a criminal deception?
Ans. The dishonest misappropriation or conversion of property entrusted to someone, in violation of the owner’s placed trust, constitutes a criminal breach of trust.
