Bharatiya Nyaya Sanhita, 2023 · Chapter XVII: Of Offences against Property · Of criminal breach of trust
Section 316: Criminal breach of trust
In plain words
Criminal breach of trust is when someone entrusted with property, or control over it, dishonestly misappropriates it, uses it for themselves, or uses or disposes of it against the law or the agreement governing the trust, or deliberately lets someone else do so. It is punishable with up to five years in prison, or a fine, or both.
- An employer who deducts employees' provident fund or ESI contributions from wages but does not pay them into the fund is treated as committing criminal breach of trust.
- By a carrier, wharfinger or warehouse-keeper: up to seven years and a fine.
- By a clerk or servant: up to seven years and a fine.
- By a public servant, banker, merchant, broker, attorney or agent: imprisonment for life or up to ten years, and a fine.
- Departing from instructions in good faith, without dishonesty, is not a crime, though it may give rise to a civil claim.
Example: A warehouse-keeper dishonestly sells furniture a customer stored with him. He commits criminal breach of trust.
A simplified explanation, prepared with AI assistance from the official text below and checked automatically against it for numbers and cross-references. The official text is the law and prevails over this summary. Not legal advice.
Read the in-depth explanation, with key Supreme Court rulings ↓
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.
Corresponding sections were matched by comparing the wording of both official texts, and for the IPC and BNS, also against a published correspondence table. Wording, punishments and structure often changed, so read both sections before relying on the match.
Source: India Code (indiacode.gov.in), the consolidated text published by the Legislative Department, Government of India. Text as updated on India Code on 25 August 2026. Words in square brackets [ ] were inserted or substituted by later amending Acts, and *** marks words omitted by an amendment. The amendment footnotes are not reproduced here. Official text on India Code.
Understanding this section
Section 316 carries forward criminal breach of trust (section 405 of the IPC) and gathers its aggravated forms, formerly sections 406 to 409, into one section. The accused got the property honestly, through entrustment, and then dishonestly misused it.
Ingredients
- Entrustment with property, or dominion over it.
- Dishonest misappropriation or conversion to own use, or dishonest use or disposal against a legal direction or contract, or wilfully allowing another to do so.
What changed
- Basic punishment rises from three years (old section 406) to five years, or fine, or both.
- Carriers, wharfingers and warehouse keepers: up to seven years and fine.
- Clerks and servants: up to seven years and fine.
- Public servants, bankers, merchants, factors, brokers, attorneys and agents: imprisonment for life, or up to ten years, and fine.
Breach of trust versus cheating
In breach of trust, the accused received property honestly and turned dishonest later. In cheating (section 318), the accused was dishonest from the start. The two cannot ordinarily coexist for the same transaction.
Civil disputes
Non-payment or failure to return goods under a contract is not by itself criminal breach of trust; dishonest misappropriation must be shown.
Key Supreme Court rulings
N. Raghavender v. State of Andhra Pradesh, CBI 2021 INSC 876
Decided under the IPC. Entrustment and dishonest misappropriation are a sine qua non of criminal breach of trust.
Rikhab Birani v. State of Uttar Pradesh 2025 INSC 512
Criminal breach of trust and cheating are "antithetical in nature and cannot coexist simultaneously".
Common mistakes
- Charging section 316 and section 318 together mechanically.
- Treating unpaid dues as breach of trust.
Read with: Section 318 BNS, Section 405 IPC
Prepared with AI assistance as a study aid. Every ruling listed was checked against the Supreme Court's own judgments on this site, and quoted words appear in those judgments; linked names open the full judgment. Read the judgments themselves before relying on them. Not legal advice.
Supreme Court judgments citing the section 316
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Shailesh Kumar Singh Alias Shailesh R. Singh v. State of Uttar Pradesh & Ors.
Whether the High Court erred in passing the impugned order, in the writ petition filed by the appellant for quashing of the FIR lodged by the Respondent No.4-complainant for offences punishable u/ss.60(b), 316(2) and…
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P Krishna Mohan Reddy v. The State of Andhra Pradesh
Whether the statement of an accused u/s.161, Cr.P.C implicating co-accused can be looked into qua such co-accused at the stage of anticipatory bail or regular bail; whether the High Court exercised its discretion in a…