(1) 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 wilfully suffers any other person so to do, commits criminal breach of trust.
Explanation 1: A person, being an employer 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.
Explanation 2: A person, being an employer, who deducts the employees’ contribution from the wages payable to the employee 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 have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.
Illustrations.
(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 Kolkata, 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 by A according to Z’s direction. Z remits one 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 illustration (c), 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 Company’s paper, here, though 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.
(2) Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to five years, or with fine, or with both.
(3) Whoever, being entrusted with property as a carrier, wharfinger, or warehouse-keeper, commits criminal breach of trust in respect of such property, shall be punished with imprisonment of either description for a term which may extend to seven years and shall also be liable to fine.
(4) Whoever, being a clerk or servant or employed as a clerk or servant, and being in any manner entrusted in such capacity with property, or with any dominion over property, commits criminal breach of trust in respect of that property, shall be punished with imprisonment of either description for a term which may extend to seven years and shall also be liable to fine.
(5) Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney, or agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.
Simplified Explanation
Section 316 of the Bharatiya Nyaya Sanhita, 2023 (BNS 2023) addresses criminal breach of trust, which occurs when someone dishonestly misappropriates or converts property entrusted to them or fails to act in accordance with legal instructions or contractual obligations regarding the property. This section is designed to protect property from misuse or misappropriation by individuals entrusted with it in various capacities.
Key Elements of Section 316:
- Definition of Criminal Breach of Trust:
- Dishonestly Misappropriating or Converting Property: If a person is entrusted with property and dishonestly uses or disposes of it for their own benefit, or violates directions of law or a legal contract in handling the property, this constitutes criminal breach of trust.
- Wilfully Allowing Others to Misuse Property: If the entrusted individual knowingly permits someone else to misappropriate or misuse the property, they also commit criminal breach of trust.
- Explanation 1 and Explanation 2:
- These explanations highlight scenarios where an employer is entrusted with employees’ contributions to social security funds (like the Provident Fund or the Employees’ State Insurance Fund). If the employer deducts these contributions from employees’ wages but fails to pay them into the fund as required by law, they are considered to have committed criminal breach of trust.
- Illustrations: The section provides several examples to clarify different situations where criminal breach of trust occurs:
- Executor Misappropriating Property: If A, who is the executor of a will, dishonestly disobeys the law by failing to divide the deceased person’s assets according to the will and instead keeps the property for personal use, A has committed criminal breach of trust.
- Warehouse Keeper Selling Goods: A, a warehouse keeper, is entrusted with Z’s furniture for safe keeping. If A sells the goods instead of returning them after the agreed period, A commits criminal breach of trust.
- Agent Misusing Funds: A, an agent, is entrusted with Z’s money to invest according to Z’s directions. If A invests the money in their own business instead of following Z’s instructions, A commits criminal breach of trust.
- Exception: If A acted in good faith, believing that investing in the Bank of Bengal would be in Z’s best interest, and not dishonestly, A has not committed criminal breach of trust, even though Z may have suffered a loss and can bring a civil suit.
- Revenue Officer Misappropriating Public Funds: If a revenue officer entrusted with public funds uses them for personal gain instead of depositing them as required by law, the officer commits criminal breach of trust.
- Carrier Misappropriating Property: If A, a carrier, is entrusted with property to transport and dishonestly misappropriates it, A commits criminal breach of trust.
- Punishments for Criminal Breach of Trust:
- General Punishment: The offender may be imprisoned for up to five years or fined, or both.
- Punishment for Specific Roles:
- If the person is a carrier, wharfinger, or warehouse-keeper, the imprisonment can extend to seven years, along with a fine.
- If the person is a clerk or servant, or employed in a similar role, the imprisonment can extend to seven years, along with a fine.
- If the person is entrusted with property as a public servant, or in their capacity as a banker, merchant, factor, broker, attorney, or agent, the punishment can be life imprisonment or imprisonment up to ten years, along with a fine.
Summary of Section 316:
- Criminal breach of trust occurs when a person dishonestly misappropriates, converts, or disposes of property that has been entrusted to them, either by law or under a contract, or when they fail to follow instructions or allow others to misuse the property.
- Specific punishments are outlined based on the role of the person committing the breach, with more severe penalties for individuals in positions of trust, such as public servants or employees handling funds.
- Employers who mismanage employee contributions to social security funds (like Provident Fund or Employees’ State Insurance Fund) are also held liable for criminal breach of trust if they fail to deposit the deducted amounts as required by law.
This section is crucial for maintaining trust in various sectors by ensuring that individuals in trusted positions handle property responsibly and in compliance with legal and contractual obligations.
