Section 405 IPC: Criminal Breach of Trust and BNS Section 316

Section 405 of the Indian Penal Code, 1860 defined criminal breach of trust. Since 1 July 2024, the corresponding definition is in Section 316(1) of the Bharatiya Nyaya Sanhita, 2023. The offence requires entrustment of property or dominion over it and dishonest dealing with that property in breach of the applicable obligation.

What is criminal breach of trust under Section 405 IPC?

Under Section 405 IPC, a person commits criminal breach of trust if property, or control over property, has been entrusted to that person and the person dishonestly misappropriates or converts it to personal use; dishonestly uses or disposes of it contrary to a legal direction or an express or implied legal contract governing the trust; or wilfully allows another person to do so.

The corresponding current definition is contained in Section 316(1) BNS. The expression entrustment concerns placing property or dominion over property in another person's hands for a specified purpose or obligation. Dishonesty involves the intention to cause wrongful gain or wrongful loss as defined under the applicable criminal law.

Essential ingredients

1. Property or dominion over property was entrusted to the accused.
2. The accused dishonestly misappropriated, converted, used or disposed of the property, or wilfully permitted another to do so.
3. The dealing violated a legal direction or a legal contract, express or implied, governing the entrusted property, where that form of breach is alleged.
4. The necessary dishonest intention is established from the evidence and circumstances.

A mere breach of contract, failure to repay money, or business dispute does not automatically establish criminal breach of trust. Entrustment and the required dishonest conduct must be proved.

Explanations under Section 405 IPC

Explanation 1: Employees' Provident Fund contributions

An employer, whether or not an establishment is exempt under Section 17 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, who deducts an employee's contribution from wages for credit to a Provident Fund or Family Pension Fund is deemed to be entrusted with that contribution. Default in remitting the deduction in violation of the governing law is deemed dishonest use in breach of a legal direction. This explanation is also reflected in Section 316(1) BNS.

Explanation 2: Employees' State Insurance contributions

Where an employer deducts an employee's contribution for the Employees' State Insurance Fund administered under the Employees' State Insurance Act, 1948, the deducted amount is deemed entrusted to the employer. Default in remitting it in violation of that Act is deemed dishonest use contrary to a legal direction. The BNS retains this explanation.

Illustrations to Section 405 IPC

The six statutory examples are set out below in accessible language, retaining their original legal effect.

1. (a) Executor. 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.
2. (b) Warehouse keeper. 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.
3. (c) Agent. 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 according to Z's direction. Z remits a lakh of rupees to A with directions to invest in Company's paper. A dishonestly disobeys the directions and employs the money in his own business. A has committed criminal breach of trust.
4. (d) Good faith. But if A, in the preceding 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 those shares for Z, then even if Z suffers loss and may bring a civil action, A has not committed criminal breach of trust because he did not act dishonestly.
5. (e) Public money. A, a revenue officer, is entrusted with public money and is directed by law or bound by contract to pay it into a treasury. A dishonestly appropriates the money. A has committed criminal breach of trust.
6. (f) Carrier. A, a carrier, is entrusted by Z with property to be carried by land or water. A dishonestly misappropriates the property. A has committed criminal breach of trust.

Punishment for criminal breach of trust

Special categories formerly dealt with under IPC Sections 407, 408 and 409 are consolidated within BNS Section 316. Classification, investigation, bail and trial are governed by the applicable procedural law and facts.

Frequently asked questions

Is Section 405 IPC still applicable?

It remains relevant to historical offences and saved proceedings. For offences committed on or after 1 July 2024, Section 316 BNS is generally the corresponding provision.

Does Section 405 IPC prescribe punishment?

No. Section 405 defines the offence. IPC Section 406 prescribed the general punishment; BNS Section 316(2) now provides the corresponding general punishment.

Is every unpaid debt criminal breach of trust?

No. A debt or unpaid contractual obligation, without proof of entrustment and dishonest misappropriation or other prohibited dealing, is not enough by itself.

Official statutes and further reading

For authoritative statutory language, consult the Bharatiya Nyaya Sanhita, 2023 (India Code PDF), the India Code portal, and the NCRB BNS section reference. The original IPC sections remain relevant for earlier conduct.

Legal information only. Apply the statutory text and any subsequent amendments, notifications and binding judicial decisions to the particular facts.