IPC Section 405 - Criminal breach of trust

405. Criminal breach of trust. Whoever, being in any manner entrusted 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 any direction of law prescribin g the mode in

which such trust is to be discharged, or of any legal contract, express or implied, which he has made

touching the discharge of such trust, or wilfully suffers any other person so to do, commits "criminal

breach of trust".

1[2[Explanation 1 ].--A person, being an employer 3[of an establishment whether exempted under

section 17 of the Employees ' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) or

not] who deducts the employee's contribution from the wages payable to the employee for credit to a

Provident Fund or Family Pension Fund established by any law for the time being in force, shall be

deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes

default in the payment of such contribution to the said Fund in violation of the said law , shall be deemed

to have dishonestly used the amount of the said contribution in violation of a direction of law as

aforesaid.]

4[Explanation 2.--A person, being an employer, who deducts the employees ' contribution from the

wages payable to the emplo yee for credit to the Employees' State Insurance Fund held and administered

by the Employees ' State Insurance Corporation established under the Employees ' State Insurance Act,

1948 (34 of 1948), shall be deemed to have been entrusted with the amount of the contribution so

deducted by him and if he makes default in the payment of such contribution to the said Fund in violation

of the said Act, shall be deemed to h ave dishonestly used the amount of the said contribution in violation

of a direction of law as aforesaid.]

Illustration s

(a) 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.

(b) 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.

(c) A, residing in Calcutta, is agent for Z, residing at Delhi. There is an express or implied contract between A and Z, that a ll

sums remitted 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 the same in Company's paper. A dishonestly disobeys the directions and employs the money in his own business. A has

committed criminal breach of trust.

(d) But if A, in the last 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 shares in the Bank of Bengal, for Z, instead of buying Compan y's

paper, here, thought Z should suffer loss, and should be entitled to bring a civil action against A, on account of that loss, yet A,

not having acted dishonestly, has not committed criminal breach of trust.

(e) A, a revenue -officer, is entrusted with public money and is either directed by law, or bound by a contract, express or

implied, with the Government, to pay into a certain treasury all the public money which he holds. A dishonestly appropriates the

money. A has committed criminal breach of trust.

(f) A, a carrier, is entrusted by Z with property to be carried by land or by water. A dishonestly misappropriates the property.

A has committed criminal breach of trust.