BNS Section 316 — Criminal breach of trust
CHAPTER XVII OF OFFENCES AGAINST PROPERTY — Of criminal misappropriation of property
Criminal
Summary
Sub-section (1) defines the offence of criminal breach of trust. A person commits this offence if they have been entrusted with property, or with control over property, and then dishonestly misappropriate it or use it for their own benefit. It also covers dishonestly using or disposing of the property in a way that violates any legal direction about how the trust should be carried out, or any express or implied contract they made about that trust. The offence is also committed if the person wilfully allows someone else to do any of these things.
Explanation 1 states that an employer, whether exempted under section 17 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 or not, who deducts an employee's contribution from wages for credit to a Provident Fund or Family Pension Fund established by law, is considered to have been entrusted with that deducted amount. If the employer defaults in paying that contribution to the fund in violation of the law, they are considered to have dishonestly used the amount in violation of a direction of law.
Explanation 2 states that an employer who deducts an employee's contribution from wages for credit to the Employees' State Insurance Fund, held and administered by the Employees' State Insurance Corporation under the Employees' State Insurance Act, 1948, is considered to have been entrusted with that deducted amount. If the employer defaults in paying that contribution to the fund in violation of that Act, they are considered to have dishonestly used the amount in violation of a direction of law.
The illustrations give examples of the offence. Illustration (a) shows an executor who dishonestly disobeys the law directing them to divide the deceased person's effects according to the will and appropriates them for their own use, committing criminal breach of trust. Illustration (b) shows a warehouse-keeper who is entrusted with furniture under a contract to return it on payment, but dishonestly sells the goods, committing the offence. Illustration (c) shows an agent who is directed to invest money in Company's paper but dishonestly disobeys and uses the money in their own business, committing the offence. Illustration (d) clarifies that if the agent in illustration (c) acts in good faith, believing it is better for the principal's advantage, and disobeys directions without dishonesty, they have not committed criminal breach of trust, even if the principal suffers loss and can bring a civil action. Illustration (e) shows a revenue-officer entrusted with public money who dishonestly appropriates it, committing the offence. Illustration (f) shows a carrier entrusted with property who dishonestly misappropriates it, committing the offence.
Sub-section (2) sets the punishment for criminal breach of trust generally. The offender is punishable with imprisonment of either description for a term that may extend to five years, or with fine, or with both.
Sub-section (3) deals with a person entrusted with property as a carrier, wharfinger, or warehouse-keeper who commits criminal breach of trust in respect of that property. The punishment is imprisonment of either description for a term that may extend to seven years, and the offender is also liable to fine.
Sub-section (4) deals with a clerk or servant, or a person employed as a clerk or servant, who is entrusted in that capacity with property or control over property and commits criminal breach of trust in respect of that property. The punishment is imprisonment of either description for a term that may extend to seven years, and the offender is also liable to fine.
Sub-section (5) deals with a person entrusted with property or control over property in their capacity as a public servant, or in the way of their business as a banker, merchant, factor, broker, attorney, or agent, who commits criminal breach of trust in respect of that property. The punishment is imprisonment for life, or imprisonment of either description for a term that may extend to ten years, and the offender is also liable to fine.
Official Text
(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.
Related Provisions
criminal breach of trust
fraud (cheating / criminal breach of trust)
Related Judgments
- SC (2024) Vol.8 p.670 — Supreme Court of India (2024)
- SC (2025) Vol.3 p.1309 — Supreme Court of India (2025)
- SC (2025) Vol.11 p.291 — Supreme Court of India (2025)
- SC (2025) Vol.6 p.280 — Supreme Court of India (2025)
- SC (2025) Vol.7 p.105 — Supreme Court of India (2025)
- SC (2025) Vol.3 p.1531 — Supreme Court of India (2025)
- SC (2024) Vol.6 p.129 — Supreme Court of India (2024)
- SC (2025) Vol.9 p.283 — Supreme Court of India (2025)