BNS Section 316: Criminal Breach of Trust (Old IPC 405 to 409)

Read this in Hindi: हिंदी में पढ़ें

The old IPC Sections 405 to 409 on criminal breach of trust are now combined in Section 316 of the Bharatiya Nyaya Sanhita, 2023. Section 316(1) gives the definition (old IPC 405) and Section 316(2) is the general punishment (old IPC 406), which the BNS has raised from three years to five years. The offence is cognizable, non-bailable and triable by a Magistrate of the first class.

Five IPC sections, one BNS section

The IPC dealt with criminal breach of trust (CBT) in five separate sections. The BNS places all of them in Section 316 as five sub-sections:

• 316(1): definition (old 405)
• 316(2): general punishment (old 406)
• 316(3): CBT by a carrier, wharfinger or warehouse-keeper (old 407)
• 316(4): CBT by a clerk or servant (old 408)
• 316(5): CBT by a public servant, banker, merchant, factor, broker, attorney or agent (old 409)

The definition: Section 316(1)

A person commits criminal breach of trust when he is entrusted with property, or with dominion over property, and then dishonestly does any of the following:

• misappropriates it or converts it to his own use;
• uses or disposes of it in violation of a legal direction prescribing how the trust is to be discharged, or of a legal contract (express or implied) he has made about the trust;
• wilfully allows any other person to do any of the above.

Two ingredients to remember

• Entrustment: the property must have been handed over to, or placed under the control of, the accused in trust. Without entrustment there is no CBT.
• Dishonest misappropriation or misuse: the accused must act dishonestly after receiving the property. A mere failure to repay or a breach of contract is not enough.

Provident fund and ESI deductions

Two Explanations deal with employers. An employer who deducts the employee’s contribution to a provident fund, family pension fund or the Employees’ State Insurance fund from wages is treated as entrusted with that money. If he does not deposit it as the law requires, he is treated as having dishonestly used it. These Explanations were also in IPC 405.

Punishment

• 316(2), general: imprisonment of either description up to five years, or fine, or both. Under IPC 406 the maximum was three years. This is the main change.
• 316(3), carrier, wharfinger, warehouse-keeper: up to seven years and fine.
• 316(4), clerk or servant: up to seven years and fine.
• 316(5), public servant, banker, merchant, factor, broker, attorney or agent: imprisonment for life, or up to ten years, and fine.

Old vs new: mapping and classification

Compounding under Section 359 BNSS

• 316(3) can be compounded by the owner of the property without the court’s permission.
• 316(2) and 316(4) can be compounded by the owner, but only with the permission of the court.
• 316(5) is not compoundable.

What changed in the BNS

• Five sections merged into one with five sub-sections.
• General punishment raised from three years (IPC 406) to five years (BNS 316(2)).
• The aggravated forms keep their old punishments.
• Because the maximum in 316(2) is now five years, the case falls within the three-to-seven-year band in which police may hold a preliminary enquiry with a DSP’s permission under Section 173(3) BNSS before registering an FIR.

CBT or cheating? The question every court asks

Cheating is now Section 318 BNS (old IPC 415 and 420). The difference turns on when the dishonesty begins:

• Cheating: the accused deceives the victim from the start, and the victim hands over property because of that deception.
• CBT: the property is handed over lawfully and honestly; the dishonesty comes later, when the accused misappropriates it.

In Delhi Race Club (1940) Ltd. v. State of Uttar Pradesh, 2024 INSC 626, a bench of Justices J.B. Pardiwala and Manoj Misra explained that the two offences rest on different foundations and generally cannot both be made out on the same set of facts. The Court also repeated that a simple commercial dispute or breach of contract, without dishonest intent, is a civil matter, not a crime.

In Pratibha Rani v. Suraj Kumar (1985) 2 SCC 370, the Supreme Court held that a wife’s stridhan remains her absolute property even when kept with the husband or in-laws, and its dishonest retention can amount to criminal breach of trust. This is why CBT is often charged in matrimonial cases.

If your money or property was misused: practical steps

• Collect proof of entrustment. Agreements, receipts, bank transfers, emails or messages that show the property was handed over for a specific purpose.
• Collect proof of misuse. Demands for return and the refusal, evidence of sale or diversion, and accounts.
• File a written complaint at the police station. CBT is cognizable, so an FIR can be registered. Because of the three-to-seven-year band, the police may first make a preliminary enquiry within 14 days with a DSP’s permission.
• If the police do not act, send the complaint by post to the Superintendent of Police under Section 173(4) BNSS, then approach the Magistrate under Section 175(3), attaching your SP application with an affidavit.
• Consider civil remedies too. A suit for recovery can run alongside a criminal case where the facts support both.

Exam angle

• Mapping: 405 to 316(1), 406 to 316(2), 407 to 316(3), 408 to 316(4), 409 to 316(5).
• Punishment change: IPC 406 was up to 3 years; BNS 316(2) is up to 5 years.
• All punishment clauses are cognizable, non-bailable and triable by a Magistrate of the first class.
• Entrustment is the key ingredient that separates CBT from theft and cheating.
• Compounding: 316(3) without permission; 316(2) and 316(4) with permission; 316(5) not compoundable.

Quick quiz

Practise more

Section numbers under the BNS, BNSS and BSA are now asked in every law exam. Our New Criminal Laws Guide maps every IPC, CrPC and Evidence Act section to its new number, and the free AIBE XXII mock tests them under exam timing.

Sources

• Bharatiya Nyaya Sanhita, 2023, Sections 316 and 318 (official text as published on India Code)
• Bharatiya Nagarik Suraksha Sanhita, 2023, First Schedule, Sections 173, 175(3) and 359
• Supreme Court of India: Delhi Race Club (1940) Ltd. v. State of Uttar Pradesh, 2024 INSC 626
• Supreme Court of India: Pratibha Rani v. Suraj Kumar (1985) 2 SCC 370