Bharatiya Nyaya Sanhita, 2023
Section 316 BNS: Criminal Breach of Trust
Section 316 of the Bharatiya Nyaya Sanhita, 2023 defines criminal breach of trust and prescribes different punishments depending on the capacity in which property or dominion over property was entrusted.
Section 316(1) BNS - Definition of Criminal Breach of Trust
A person commits criminal breach of trust when, having been entrusted in any manner with property or dominion over property, that person dishonestly misappropriates or converts the property to his own use, dishonestly uses or disposes of it contrary to a direction of law or a legal contract concerning discharge of the trust, or wilfully allows another person to do so.
Entrustment is the foundation of the offence. The property may remain owned by another person, but the accused must have received the property or dominion over it in a relationship carrying an obligation as to its use, custody, application or disposal.
Essential Ingredients of Criminal Breach of Trust
The principal elements are:
- entrustment of property or dominion over property;
- a duty or obligation governing the manner in which the property is to be dealt with;
- dishonest misappropriation, conversion, use or disposal of the property, or wilfully suffering another person to do so; and
- where applicable, violation of a direction of law or an express or implied legal contract governing discharge of the trust.
A mere civil dispute, breach of contract or failure to account does not automatically establish criminal breach of trust. The statutory requirement of dishonest conduct in relation to entrusted property must be proved.
Explanation 1 - Employees' Provident Fund Contributions
Where an employer deducts an employee's contribution from wages for credit to a Provident Fund or Family Pension Fund established by law, the employer is deemed to have been entrusted with the deducted amount. Default in paying that contribution to the fund in violation of the applicable law is deemed to be dishonest use of the amount in violation of a direction of law.
The explanation expressly refers to establishments whether exempted under Section 17 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 or not.
Explanation 2 - Employees' State Insurance Contributions
An employer who deducts an employee's contribution for credit to the Employees' State Insurance Fund is deemed to have been entrusted with that amount. If the employer defaults in paying the contribution to the fund in violation of the Employees' State Insurance Act, 1948, the default is deemed to be dishonest use in violation of a direction of law.
Statutory Illustrations
Executor of a will
An executor who dishonestly disobeys the law requiring distribution of the deceased person's effects according to the will and appropriates them to his own use commits criminal breach of trust.
Warehouse-keeper
A warehouse-keeper entrusted with furniture under an agreement to return it on payment of warehouse charges commits criminal breach of trust if he dishonestly sells the goods.
Agent misusing investment money
An agent who receives money with directions to invest it in a specified manner and dishonestly uses it in his own business commits criminal breach of trust.
Good-faith departure from instructions
Where an agent departs from investment instructions in good faith, believing another investment is more advantageous for the principal, the illustration states that civil liability may arise for loss, but criminal breach of trust is not committed in the absence of dishonesty.
Revenue officer entrusted with public money
A revenue officer entrusted with public money who dishonestly appropriates it instead of paying it into the required treasury commits criminal breach of trust.
Carrier entrusted with property
A carrier entrusted with property for carriage by land or water commits criminal breach of trust if the carrier dishonestly misappropriates the property.
Punishment, Cognizability, Bail and Trial Court
| Provision | Offender / offence | Punishment | Cognizable | Bail | Trial Court |
|---|---|---|---|---|---|
| 316(2) | Criminal breach of trust generally | Imprisonment up to five years, or fine, or both | Yes | Non-bailable | Magistrate of the first class |
| 316(3) | Carrier, wharfinger or warehouse-keeper | Imprisonment up to seven years and fine | Yes | Non-bailable | Magistrate of the first class |
| 316(4) | Clerk or servant entrusted in that capacity | Imprisonment up to seven years and fine | Yes | Non-bailable | Magistrate of the first class |
| 316(5) | Public servant, banker, merchant, factor, broker, attorney or agent | Imprisonment for life, or imprisonment up to ten years, and fine | Yes | Non-bailable | Magistrate of the first class |
Difference Between Section 314 and Section 316 BNS
Section 314 BNS deals with dishonest misappropriation or conversion of movable property. Section 316 requires the additional and fundamental element of entrustment of property or dominion over property.
In practical terms, criminal breach of trust concerns dishonest dealing with property received subject to a trust-like legal obligation, whereas general misappropriation can arise without prior entrustment.
Compounding of Certain Section 316 Offences
Under the Bharatiya Nagarik Suraksha Sanhita, 2023, criminal breach of trust under Section 316(2), and criminal breach of trust by a clerk or servant under Section 316(4), are listed among offences that may be compounded by the owner of the property with the permission of the Court before which the prosecution is pending.
Compounding is procedural and depends on the statutory conditions and the permission of the competent Court. The other aggravated categories should not be assumed to be compoundable merely because Sections 316(2) and 316(4) are specifically listed.
Official Legal Sources
For authoritative statutory wording, procedural classification and commencement information, consult the Ministry of Home Affairs and India Code resources listed in the right sidebar. The official Act, BNSS First Schedule and other statutory material prevail in case of any discrepancy in a secondary source.
Frequently Asked Questions
What is criminal breach of trust under Section 316 BNS?
It involves dishonest misappropriation, conversion, use or disposal of property by a person who was entrusted with the property or dominion over it, including conduct contrary to law or a legal contract governing the trust.
Is entrustment necessary under Section 316?
Yes. Entrustment of property or dominion over property is a foundational element of criminal breach of trust.
What is the punishment for ordinary criminal breach of trust?
Section 316(2) provides imprisonment up to five years, or fine, or both.
Is Section 316 BNS bailable?
The punishable variants under Sections 316(2) to 316(5) are classified as non-bailable.
Is Section 316 BNS cognizable?
Yes. Sections 316(2) to 316(5) are classified as cognizable.
Which court tries offences under Section 316?
The BNSS First Schedule makes each punishable variant under Sections 316(2) to 316(5) triable by a Magistrate of the first class.
Does non-payment of deducted EPF or ESI contribution come within Section 316?
The statutory explanations deem deducted employee contributions to have been entrusted to the employer and provide that default in payment in violation of the applicable law is deemed dishonest use in violation of a direction of law.
This page provides general legal information. Application of Section 316 depends on the facts, evidence and law applicable to the individual case.