Discuss the law relating to criminal breach of contract in India

Question: Discuss the law relating to criminal breach of contract in India

Find the answer to the mains question only on Legal Bites. [Discuss the law relating to criminal breach of contract in India.]

Answer:

Sections 405 to 409 deal with criminal breach of trust.

Section 405 defines criminal breach of trust as:

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’.

The essential ingredients of criminal breach of trust are:

1. the accused must be entrusted with property or dominion over it, and
2. he must have dishonestly misappropriated the property or converted it to his own use or disposed of it in violation of such trust.

There are two distinct parts involved in the commission of the offence of criminal breach of trust. The first consists of the creation of an obligation in relation to the property over which dominion or control is acquired by the accused.

The second is a misappropriation or dealing with the property dishonestly and contrary to the terms of obligation created. The principal ingredients of criminal breach of trust, thus, are ‘entrustment’ and ‘dishonest misappropriation’.

The offence of criminal breach of trust, as defined under s 405, is similar to the offence of embezzlement under English law. A reading of the section suggests that the gist of the offence of criminal breach of trust is ‘dishonest misappropriation’ or ‘conversion to own use’ another’s property, which is nothing but the offence of criminal misappropriation defined under section 403.

The only difference between the two is that in respect of criminal breach of trust, the accused is entrusted with property or with dominion or control over the property.

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