BACK TO SECTIONS(2009) 13 SCC 200
Non-BailableCognizable: CognizableMagistrate First Class
THE STATUTE
Original Text
Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.
Simplified
Section 406 provides the standard punishment for CBT — 3 years, non-bailable and cognizable. Aggravated forms carry higher punishments: CBT by a carrier, wharfinger, or warehouse keeper (Section 407 — 7 years); CBT by agents (Section 408 — 7 years); CBT by bankers, merchants, factors, attorneys, or public servants (Section 409 — life imprisonment or 10 years). The standard 3-year Section 406 is the most commonly charged form in domestic and employment disputes, while Section 409 applies to institutional fraud.
Legal Evolution
Section 406 prescribes punishment for criminal breach of trust (Section 405) — the dishonest misappropriation or conversion of property entrusted to the accused. The three-year maximum for basic breach of trust increases to seven and ten years for trust betrayed by servants, agents, and public servants. The provision has been central to prosecutions for embezzlement, financial fraud, and abuse of fiduciary relationships across India's commercial and public sector.
Landmark Precedents
Babu Bhai Udesia v. State of Gujarat (2009)
RELEVANCE
CBT under Section 406 is established when an employer deducts PF contributions from salaries but fails to remit them — the deduction creates entrustment of the employees' money.
Practical Scenarios
"A domestic helper who runs away with the family's valuables after being entrusted with access — Section 406."
"An employee who embezzles petty cash over months — Section 406."
Common Queries
Yes — criminal breach of trust under Section 406 is non-bailable, highlighting its gravity as a violation of fiduciary trust.
Four elements: (1) the accused was entrusted with property or had dominion over property; (2) the accused dishonestly misappropriated or converted the property; (3) the misappropriation violated a direction of law or legal contract governing the trust; (4) dishonest intent. All four must coexist. Velji Raghavji Patel v. State of Maharashtra (1965) is the landmark case establishing these elements.
Theft (Section 378): taking property without the owner's consent — property was never given to the accused. CBT (Section 405/406): misusing property legitimately entrusted — property was given to the accused. A cashier who takes from a register without being entrusted commits theft; a cashier entrusted with the register who takes from it commits CBT.
Section 406 (base CBT): up to 3 years + fine. Section 408 (CBT by clerk or servant): up to 7 years. Section 409 (CBT by public servant, banker, broker, attorney, or agent): life or up to 10 years. The trustee's role escalates the punishment.
High Courts frequently exercise Section 482 CrPC powers to quash Section 406 cases in matrimonial disputes — particularly when the matter has been genuinely settled, allegations are vague, or the complaint is filed as a pressure tactic. But specific allegation of identifiable property entrusted and misappropriated makes quashing less likely.
Yes. BNS Section 316 replaces IPC Section 406. Base punishment (3 years + fine) preserved. BNS 317 = IPC 408 (CBT by employee, 7 years); BNS 318 = IPC 409 (CBT by public servant, life/10 years). The definition in BNS 315 corresponds to IPC 405. Substantively unchanged.