IPC Section 406: Punishment for Criminal Breach of Trust Explained in Simple Terms

Criminal breach of trust is a serious legal issue in India. When someone is trusted with money or property and they misuse it, that person can be punished under the Indian Penal Code Section 406. This law applies to individuals who break the trust placed in them and act dishonestly.

If you're looking to understand what IPC 406 means, how it's applied, and what kind of punishment it carries, this article covers everything in plain language. Whether you’re a student, a professional, or someone dealing with a trust-related dispute, you’ll find this information useful.

What is Criminal Breach of Trust in Indian Law?

Criminal breach of trust happens when a person is given property or money for a specific purpose and they use it for something else, usually for their own benefit. This act is covered under Section 405 of the Indian Penal Code (IPC).

According to IPC Section 405:

• A person must have been trusted with someone else’s property.
  
  

• They must have used it in a dishonest way or against the instructions given.
  
  

• The misuse must lead to a loss for the rightful owner.
  
  

For example, if a friend borrows your gold for safekeeping but sells it without your consent, that’s a clear breach of trust.

IPC Section 406: What Does It Say?

Section 406 of IPC defines the punishment for criminal breach of trust. Here’s what the law states:

"Anyone who commits criminal breach of trust shall be punished with imprisonment for a term up to three years, or with a fine, or both."

In simple words:

• If someone misuses property that was entrusted to them, they can be sent to jail.
  
  

• The jail term can go up to three years.
  
  

• The court may also impose a fine.
  
  

• In some cases, both jail time and a fine can be given.
  
  

Key Ingredients to Prove an Offense Under IPC 406

To hold someone guilty under Section 406, the following conditions must be proven:

1. Trust Relationship: The accused must have been given property or responsibility with trust.
   
   

2. Misuse of Property: That property must have been used in a dishonest or unauthorized way.
   
   

3. Intention: The misuse must be intentional, not accidental or due to misunderstanding.
   
   

If any of these elements are missing, the case may not stand in court.

Is IPC Section 406 a Bailable Offense?

No, IPC 406 is a non-bailable offense. This means:

• The police have the authority to arrest the accused without needing prior permission from the court.
  
  

• Getting bail is not automatic. The court will review the case and decide based on the facts.
  
  

Is IPC 406 Compoundable?

Yes, IPC Section 406 is compoundable, but not in all cases. It can only be settled if:

• The complainant agrees to withdraw the case, and
  
  

• The court gives permission to end the case.
  
  

This helps in resolving minor trust disputes outside of court when both parties want to settle.

Difference Between Criminal Breach of Trust and Theft

People often confuse criminal breach of trust with theft, but there’s a clear difference:

Aspect

Criminal Breach of Trust

Theft

Criminal breach of trust and theft are two distinct offenses under Indian law, differing mainly in the nature of possession and consent. In a case of criminal breach of trust, the person is given property or money with permission and trust. The possession is legal at the start, but the individual later misuses it for personal gain, violating the terms under which it was given. For example, if someone is entrusted with funds for a specific purpose but uses them for themselves, it qualifies as a breach of trust. On the other hand, theft involves taking someone’s property without any permission or knowledge. The possession is illegal from the beginning, such as when a person steals a wallet. The key difference lies in how the property was obtained—breach of trust starts with consent and ends in misuse, while theft involves no consent at all.

How to File a Case Under IPC 406

If you believe someone has committed a criminal breach of trust against you, follow these steps:

1. Report the Incident: Visit your nearest police station and file an FIR.
   
   

2. Provide Evidence: Collect and present any documents or messages that show you entrusted the property and how it was misused.
   
   

3. Get Legal Advice: A criminal lawyer can guide you through the court process.
   
   

4. Court Proceedings: After investigation, the police may arrest the accused, and the case will go to trial.
   
   

Real-Life Examples of IPC Section 406 in Action

Let’s look at a few simple examples to understand how this law works:

• Employee Case: A company accountant is given control over office funds but diverts them to his personal bank account. This qualifies as criminal breach of trust.
  
  

• Business Partner Case: Two people run a business together. One partner withdraws joint funds and disappears. This can be prosecuted under IPC 406.
  
  

• Family Property Case: A brother is given land to manage for the family, but he sells it secretly. This is also a breach of trust.
  
  

Notable Court Judgments on IPC Section 406

Several court cases have clarified the use of IPC Section 406. Some of them include:

• Sardar Singh v. State of Haryana (1977): The court ruled that simply failing to return property isn't enough—there must be dishonest intent.
  
  

• Velji Raghavji Patel v. State of Maharashtra (1965): This case explained that trust and misuse must be clearly proven for a conviction.
  
  

These cases show how courts require solid evidence and a clear pattern of dishonest behavior.

Can You Be Arrested Without Proof?

No. While IPC 406 is a cognizable offense, an arrest cannot be made without any evidence. Police must investigate and find enough proof before making a formal arrest. Courts also require that the complainant show clear proof of entrustment and misuse.

Frequently Asked Questions (FAQs)

1. What is the maximum sentence under IPC 406?
Up to three years in jail, or a fine, or both.

2. Can the accused get bail?
Yes, but it’s not automatic. Bail depends on the seriousness of the case and the court's decision.

3. Can criminal breach of trust be settled out of court?
Yes, with court approval. IPC 406 is compoundable.

4. Is Section 406 applicable in business or company-related fraud?
Yes. If a partner or employee misuses funds, this law can be applied.

5. Can a civil case also be filed for breach of trust?
Yes. You can file a civil case to recover money or property along with the criminal case.

Final Thoughts

IPC Section 406 deals with the punishment for criminal breach of trust, a crime that affects personal relationships, families, businesses, and institutions. When someone misuses property given to them in good faith, they can face legal action and punishment.

The purpose of this law is to protect people from fraud by those they trust—whether it’s a friend, employee, or business partner. If you are affected by such a situation, act quickly. Legal help can guide you in collecting evidence and filing a case properly.