Breach of Trust
Image source -

This article is written by Isha, a second year student at Bharti Vidyapeeth, New Law College Pune. This article talks about Criminal misappropriation & Breach of Trust.


The word misappropriation is defined under Section 403 of Indian Penal Code,1860 which is defined as whoever;

  1. Dishonestly misappropriated for its own use or another person at the instance of it.
  2. Any movable property punishment for the offence is imprisonment of either description which may extend to two years or with fine or with both Section 405 is based on criminal breach of trust. Here ‘trust’ is the essential and ‘breach’ of this makes the offence under section 405 which is punishable with imprisonment of either description which may extend to three years or seven years (depending on the person who has breached the trust) or with fine or both. 

In other words, when one person dishonestly misuses or misappropriate the property provided the property is movable in nature for own use or another is known as criminal misappropriation. 

Essential Ingredients

To constitute the offence of misappropriation the following essential ingredient must be there; 

The property must be of Another

For constituting criminal misappropriation the essence behind this act is that the property must be of some other owner other than the person using it dishonestly for his own use. 

Case 1

Person A took something from person B by mistake or unknowingly but returned it when he found property belong to person B. In this case, there is no misappropriation of property.

Case 2

Person A took something from person B by mistake or unknowingly but don’t return it even when he found property belong to person B. 

Finding of Property 

Someone gets a property of others on the roadside, let’s say, a gold ring or wallet and he keeps it to himself since the real owner is unknown but even if the true owner is identified he uses and keeps the property with himself this act is an offence known as misappropriation of property.

Explanation to this section involves that in case of a finding of the property if one has taken all the careful measures to ascertain the true owner and kept the goods for a subsequent time for restoring it to the real owner but if instantly misappropriate the goods he would be liable under this section of IPC. 

Converts to Own Use;

The essence ‘converts to his own use’ signify the usage or deals with the property in decrying the right of the owner.

Ramaswami Nadar VS. The state of Madras

Servant or Clerk Taking his Master’s Property

Theft of property by servant or clerk stealing the property of his master is a punishable offence with even greater severity under Section 381 of Indian Penal Code. This is so because the master or owner impose greater trust in them to look and care about the property.

Therefore, theft of these property amounts to a violation of that trust. The punishment for this offence in the theft of this possession of these properties is punishable of imprisonment extends to 7 yrs with a subsequent fine. 

Dishonest Intention 

Whoever dishonestly misappropriated or converted to his own use any movable property shall be punished with imprisonment of duration which may extend to two years or with fine or more.

For example; 

  • When two people, A and B jointly own a property lets say a car and later B without the consent of A sold that particular good for his own self motive.
  • Found some property whose owner can be found and you used it personally for own use. Using of property whose owner is not known but you used it immediately for your own gain without waiting for sufficient time. A Criminal complaint regarding this matter is not maintainable under court, referring to the case U. Dhar & Anr vs The State Of Jharkhand.
               Click Above

Theft under IPC

Theft under IPC is an act of stealing property belonging to someone else. However, its certain requirements and specific ingredients.

According to Section 378 theft includes misappropriating taking or stealing any movable property out of the possession of a person. This act of stealing must be without the consent of the concerned person. Therefore, in order to constitute, it must fulfil the following conditions:

  • Dishonest intention to take the property 
  • Movable property, not immovable one
  • Without the consent of the concerned person
  • Must move the property to execute the act

All these essentials must be there to fulfil the requirements. If any of the following essentials are not present then the offender is not guilty of the offence of theft.

Distinction between Theft and Criminal Misappropriation 

Before discussing the distinction between theft and criminal misappropriation lets get clear about the similarities between the two which areas:

  1. Movable property- For constituting the offence of criminal misappropriation and theft the basic common element behind this is that the means of property or goods should be movable in nature for committing these acts. To be precise, the property should move from one place to another for executing the purpose of theft or misappropriation of the property.
  2. Dishonest intention- The intention or the motive behind these acts should be dishonest. The act involves fraud or misappropriation activity by default.

Now talking about the differences 

  • In the case of theft, the intention behind this act is dishonest or malafide with irrational motive and the person constituting theft is cognizant about the process that he is doing wrong.

Whereas, in the case of criminal misappropriation initially there may be the case that there is no dishonest intention in the finder of goods for misappropriating the goods but the offence is committed when after due time the property is detained with the wrong person illegally without the knowledge of the actual owner of the property. Later after some time, there might be the wrong intention to commit misappropriation of the property for his personal use.

  • The second difference between the two is that in theft the consent of the true owner is not known to the party on the other hand in case of misappropriation initially the true owner gave consent to the person for using the property and later maliciously the person used it for his own purpose. In theft, the consent is nowhere involved.
  • Timing of the offence- In theft, the moment when someone took the property of the owner dishonestly he committed the offence of theft. Rather in case of misappropriation, the offence is committed when the person unduly denies giving the property to the true owner he committed the offence of misappropriation without the consent of the true owner in his own favour. Then the act of misappropriation is committed.

Offences Affecting Property – Criminal Breach of Trust

The Indian Penal Code, 1860 contains various offences against properties under Chapter XVII. Most of these offences require physical movement of properties by the aggrieved person, some of them just require a dishonest intention mind. For instance, criminal breach of trust is one such offence. The basic element of this offence is the infringement of trust with respect to the usage of goods or properties.

Aggravated Form of Criminal Misappropriation

Section 404 is an aggravated form of Criminal misappropriation. This section confers to afford protection of a deceased to the property under which the circumstance needs special protection.

Key Ingredients

To constitute Section 404 of the Indian Penal Code these ingredients must be fulfilled.

(i) The good must be any movable property;

(ii) Such property should be under the possession of the deceased at the time of death of the owner;

(iii) The accused misappropriated it or converted it for his own use;

(iv) The offender did it dishonestly.

An offence under this Section is non-cognizable, bailable, non-compoundable, and capable of being tried by a magistrate of the first class.

Scope of the Section

An individual who converts any movable goods or property to his own use must be punished with imprisonment of either subsequent term which may extend to two years or both.

Criminal Breach of Trust

According to Section 405, this offence requires a person to confer a property or dominion over it onto others. Moreover, this is basically a form of trust which the victim accords on the offender with respect to his property.

Secondly, the offender must misappropriate or convert that property to his own use. He may even fraudulently use or dispose of that property by infringing a law to control or direct according to rule principle of law for proper functioning. This may even lead to the breach of any express or implied contract between the defendant and the victim himself.

For instance, A may lend his car to his friend B to use it for transportation. B, instead, uses it for transporting illegal goods like ivory. Here, B is guilty of criminally breaching A’s trust.

Essential Ingredients 


Entrustment means control over the property by one person to the other in such a way that the person on whose interests the property is handed over continues to be an owner. The word entrustment is very essential to constitute the offence of criminal breach of trust.

Following the case, Surendra Pal Singh Vs. State of Uttar Pradesh describes the same.

The only difference between the two is that in the scope of criminal breach of trust, the defendant is entrusted with property or with dominion or control over the property. As the title to the breach of law itself suggests, entrustment of property is an essential requirement before any offence under this section takes place. The language of the section is very wide. The words used are ‘in any manner entrusted with property’. So, it extends to entrustments of all kinds-whether to clerks, servants, business partners or other persons, provided they are holding a position of trust. “The term “entrusted” found in Section 405 IPC rules the word “with the property”.


The defendant must spend with a trust or secure the property with authority. There must an entrustment of property. Presiding over the case of Ramaswami Nadar State of Madras, SC held that the basic requirement of entrustment must be there to fulfil the essentials of criminal breach of trust offence under Section 405. 

Dominion Over Property

The domain is the superior right of property inland, it is the most and fullest right of goods or property which is a legal concept derived from dominium of the Roman law. The domain is the right of the property as well as the possession or use of the property. It is absolute and complete ownership of property or land. The government can under some situation seize property without or with permission.


‘Dishonest misappropriation’ is the basic element of this action. Dishonesty is as defined in Sec.24, IPC, generating wrongful gain or wrongful loss to a person. The meaning of wrongful gain and wrongful loss is defined in Section 23 IPC. In order to constitute an offence, it is not enough to attain that the money has not been accounted for or mismanaged. It has to be accepted that the defendant has insincerely put the property for his own use or to some without the permission of the owner before using. Dishonest intention to misappropriate is a crucial fact to be proved to bring home the charge of criminal breach of trust.

Case Krishan Kumar V Union of India

Misappropriation arises when a person illegally sets apart or assigns to some other person use to which it should assign to some other person to the exclusion of the owner in case of actus rea it will consist of either of the four positive acts:

  • Conversion
  • Misappropriation
  • Disposal of property
  • User

Aggravated Forms of Criminal Breach of Trust

The section of 407- 409 includes aggravated form of criminal breach of trust which talks about three distinct classes to which entitles belong i..e.a carrier, a warehouse keeper and a wharfinger who is the owner of a wharf who received some property or goods under some contract who is expected to carry the goods in the safe custody with them.

Whosoever, being entrusted with the property dishonestly converts or misappropriation for his own use in breach of any law or any legal contract commits ‘Criminal breach of Trust’.

Section 407 confers with ‘criminal breach of trust by carrier’. Carrier is basically a person who attempts or seek to transport goods for hire.

So, according to the section of 407, if any carrier, warehouse keeper or a wharfinger who is entrusted with that property not necessarily movable but dishonestly misappropriated or converts the property for own use then, in that case, he shall be punishable under the offence of criminal breach of trust. And the punishment for the same would be liable with imprisonment of 7 years with a subsequent amount of fine.

Section 408 deals with ‘criminal breach of trust by clerk or servant’


We come to the conclusion that criminal breach of trust and criminal misappropriation cannot be considered as the same offence. there is no contractual relationship of the accused with the actual owner of the property in case of criminal applies on the conversion of the property where the offender gets possession of the property by any casualty or anyhow where property must be movable and he apparently misappropriated it. In the case of criminal breach of trust, there is a legal contractual relationship of the accused with the actual owner of the property. Property can be either movable or immovable. It applies to the conversion of property held by a person in a fiduciary capacity. Further, the owner or we can say the debtor and the defendant should have a fiduciary relationship with each other. 

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:

Follow us on Instagram and subscribe to our YouTube channel for more amazing legal content.



Please enter your comment!
Please enter your name here