Section 405 in The Indian Penal Code

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
prescribing 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 willfully suffers any other
person so to do, commits “criminal breach of trust”

In Deepak Gaba and others v. State of Uttar Pradesh and anr. (2023 3 SCC 423) For Section 405
IPC to be attracted, the Following have to be established:

a) The accused was entrusted with Property, or entrusted with dominion over Property;
b) The accused had dishonestly misappropriated or converted to their own use That
property or dishonestly used or disposed that property or willfully suffer any other person
to do so, and
c) Such misappropriation, conversion use or disposal should be in violation of any direction
of law prescribing the mode in which such trust is to be discharged or of any legal
contract which the person had made, touching the discharge of such trust.

1. The accused was not entrusted with the property

Velji Raghavji Patel‟s case (supra), the Hon‟ble Supreme Court held :In order to establish
“entrustment of dominion” over property to an accused person the mere existence of that
person’s dominion over property is not enough. It must be further shown that his dominion was
the result of entrustment.(para 6)

In Ayyadurai devar In re, 1980 L.W.(Cr.) 275 it was held that to fit in the case within sec.405
IPC either thr ownership of the beneficial interest in the property in respect of which Criminal
breach of trust is alleged to have been committed must be in some other person other than the
accused and the latter must hold it on account of some other person or in some way for his
benefit (pg 276)
Such being the incidents of ordinary partnership, no entrustment of property within the meaning
of section 405 IPC is possible. Entrustment contemplated by this section is of the property which

is not his and which he does not hold in his right. Since the partnership property is as much the
property of one partner as the property of his co-partners,it cannot attract the operation of sec.
405.

In the case of partnership, every partner has dominion over the partnership property by reason of
the fact that he is a partner. This is a kind of dominion which every owner of the has over the
property. But it is not the dominion of the type which satisfies the requirements of the Sec. 405. (
Para 9) alagiri and anr. V. State by inspector of Police, Madurai (1996 SCC online Mad 77)

The property in respect of which the offence after breach of trust has been committed must be
either the property of some person other than the accused or the beneficial interest in or
ownership of it must be of some other person.(para, 14, PARTHKUMAR RAMNIKLAL
KALAVADIYA & v STATE OF GUJARAT & 1.)

Para 8. Shalini’s boutique went online and thrived more than before. As Shalini was struggling to
keep up the record of accounts. Para 11 . She mentioned this to Rahul and he consoled her And
said that he will take care of the work of the boutique.

According to this the property was not entrusted to Rahul as Shalini herself has the record of
accounts.

2. The accused has not dishonestly misappropriated the property

In Anil Kumar Bose v. State of Bihar, (1974) SCC (Cri.) 652, the Supreme Court held that mere
failure to perform a duty or observe rules of procedure may be an administrative lapse or any
error of judgement but cannot be equated with dishonest intention or cheating.

In Velji Raghavji Patel v. State Of Maharashtra 1965-2 Cri LJ 431 An owner of property, in
whichever way he uses his property and with whatever intention, will not be liable for
misappropriation and that would be so even if he is not the exclusive owner thereof. A partner
has undefined ownership along with the other partners over all the assets of the partnership. If he
chooses to use any of them for his own purposes he may be accountable civilly to the other
partners. But he does not thereby commit any misappropriation.”(para 8).

In deshal champaklal nemchand v. State (1961 Cr. LJ 654) it was held that retention of property
entrusted would not amount to this offence until dishonest misappropriation or conversion etc.
Can be correctly inferred(pg.655). On the similar lines the transaction of Rs. 7 lakh cannot
amount to criminal breach if trust until and Unless dishonest intention and dishonest
misappropriation is proved.

3. There has been no violation of any direction

It has been held in Hart Prasad Chamaria v. B.K. Surekha and others, reported in 1973(2) SCC
823 as under : Every act of breach of trust may not be resulted in a penal offence of criminal
breach of trust unless there is evidence of manipulating act of fraudulent misappropriation. An
act of breach of trust involves a civil wrong in respect of which the person may seek his remedy
for damages in civil courts but any breach of trust with a mens rea gives rise to a
criminal prosecution as well. (12 para)

If money due to the Partnership was received and put in another account or could not be said that
the partner has committed a criminal breach of trust.
Section 405 in The Indian Penal Code

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
prescribing 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 willfully suffers any other
person so to do, commits “criminal breach of trust”

In Deepak Gaba and others v. State of Uttar Pradesh and anr. (2023 3 SCC 423) For Section 405
IPC to be attracted, the Following have to be established:

a) The accused was entrusted with Property, or entrusted with dominion over Property;
b) The accused had dishonestly misappropriated or converted to their own use That
property or dishonestly used or disposed that property or willfully suffer any other person
to do so, and
c) Such misappropriation, conversion use or disposal should be in violation of any direction
of law prescribing the mode in which such trust is to be discharged or of any legal
contract which the person had made, touching the discharge of such trust.

Thus, Criminal breach of trust, would inter-alia, mean using or disposing of the property by a
person who is entrusted with or otherwise has dominion. Such an act must not only be done
dishonestly but also in violation of any direction of law or any contract express or implied
relating to carry out the trust. (Para 15,16)

In jaikrishna das manohar das v. State of Bombay (1960 3 SCR 319) :To establish a charge of
criminal breach of trust, the prosecution is not obliged to prove the precise mode of conversion,
misappropriation or misapplication by the accused of the property entrusted to him or over which
he has dominion. The principal ingredient of the offence being dishonest misappropriation or
conversion which may not ordinarily be a matter of direct proof, entrustment of property and
failure in breach of an obligation to account for the property entrusted, if proved, may in the light
of other circumstances, justifiably lead to an inference of dishonest misappropriation or
conversion. Conviction of a person for the offence of criminal breach of trust may not, in all
cases, be founded merely on his failure to account for the property entrusted to him, or over
which he has dominion, even when a duty to account is imposed upon him, but where he is
unable to account or renders an explanation for his failure to account which is untrue, an
inference of misappropriation with dishonest intent may readily be made. (Para 6)

The prosecution duty Is to establish a prima facie case of criminal breach of trust. It is the
accused who has to explain and in the absence of explanation, the Only inference is that he is
guilty.( State if Orissa v. Prafulla kumar sharma AIR 1964 Orissa 46 pg.47-48)

1. The accused was entrusted with the property

In R.K. Dalmia v. Delhi Administration the Supreme Court held that entrustment can be express
or implied, and it is not necessary that there must be a formal transfer of ownership or
possession.

It is humbly submitted that in the present case

Illustration (c) to sec. 405 shows that where there is an express or implied contract Between two
person that sum remitted by one to the other shall be invested according to the direction of the
remitter, there is entrustment of the sum remitted. Shalini remitted it to Rahul .

Emperor v. Jagannath Raghunath Das, 33 Bom LR 1518: (AIR 1932 Bom 57). In that case a
Division Bench came to the conclusion that the words of Section 405 of the Indian Penal Code
are wide enough to cover the case of partner. It was held that where on partner is given authority
by the other partners to collect moneys or property of the firm, he is entrusted with dominion
over that property; and if he dishonestly misappropriates it, he comes within Section 405 of the
Indian Penal Code

Hedge, J. speaking On behalf of the Supreme Court, in State of Gujarat v. Jaswantlat (AIR 1968
SC 700) held That before there can be any entrustmentMeaning thereby an obligation annexed to
The ownership of property and confidence reposed in and accepted by the owner or Declared and
accepted by him for the benefit Of another owner, there may be trust. But That does not mean
that such an entrustment Need conform to all the technicalities of the Law of trust. Under
Sections 14 and 15 of the Partnership Act, subject to the contract Between the partners, the
property brought Into common stock of the partnership of Acquired thereafter or otherwise shall
be the Property of the partnership. It shall be held And used exclusively for partnership business.
No partner, so long as the partnership Continues, can predicate with precision that Any part of its
assets belong to him Exclusively.

In somnath Puri v. State of Rajasthan (1972 MLJ(Cr.) 655) . It was observed that under sec. 405
as long as the accused is given possession of property for a specific purpose or to deal with it in a
particular manner , the ownership being in some other person other than the accused, he can be
said to be entrusted with that property.(pg.657)

2. The accused dishonestly misappropriated the property

In Ram chand Gurwala v. King emperor it was held that in order to establish a charge of criminal
breach of trust, it was not necessary that the accused should have actually taken tangible property
such as cash from the possession of the bank and transferred it to his own possession, as on the
transfer of the amount from the account of the bank to his own account, the accused removed ot
from the control of the bank and placed it at his own disposal and thus the conviction of the
accused for criminal breach of trust was confirmed.

In the present case, Rahul removed the money from the boutique’s account to his father’s
account, bringing the money at his own disposal and thus it would amount to criminal breach of
trust.

In Ashutosh Roy v. State, (AIR 1950 Orissa 159) it was observed that in a prosecution for
criminal breach of trust direct evidence of dishonest conversion, to the accused own use, of the
money entrusted with him, can seldom be found, and such dishonest intention and conversion
have to be inferred from the proved facts and circumstances of each case. (Pg. 165)

It is humbly submitted before the Hon’ble court that the circumstances of the present case prove
that Rahul had dishonestly misappropriated the property. Rahul was known to live a lavish life
and that to on the money lend by Shalini. For this fact he transferred the money to his father’s
account and did not tell anything about it to Shalini. When asked he was startled