The court clarified the legal interpretation of 'entrustment' and 'criminal breach of trust' under the relevant sections of the Indian Penal Code and the Negotiable Instruments Act.

Mudholka, J—This is an application for revision of the order of Shri P. V. Lele, Ses. J., Drug, upholding the conviction of the applicant under S. 409, I. P. C. & sentence of rigorous imprisonment for a period of six months.

2. It is common ground that the applicant was the agent of the Drug Branch of the firm Ladharam Kheta of Raipur at the material time. On 11-12-1943 the complainant Bhagchand, who owed quite a large sum of money to the firm, made a certain payment to the Drug Branch of the firm Ladharam Kheta.

3. According to Bhagchand he paid a sum of Rs. 3,300/- to the applicant by cheque & that instead of crediting the whole amount to his account he credited only Rs. 2,900/- therein & misappropriated the balance of Rs. 400/-.

4. The applicant denies that any cheque was handed over to him. He states that a cheque was given to his servant Khushalchand from whom he, later, received only Rs. 2,900/-. The entry relating to the payment is alleged by him to have been made by his servant Deoram.

5. Admittedly, the cheque was for a sum of Rs. 8,300/- & was drawn in favour of the firm Ladharam Kheta. It was a bearer cheque & was cashed by Khushalchand.

6. Initially, I would like to point out that this case cannot under any circumstances fall under S. 409, I. P. C. That section applies only where an entrustment is made to a public servant or, in the way of business, to a banker, merchant, factor, broker, attorney or agent. The applicant is not a public servant, nor does he come within any of the other categories referred to above. No doubt he is the servant & agent of the firm Ladharam Kheta, but he is not the agent of the complainant. By merely handing over the cheque to him the complainant did not constitute him as his agent, as he (the complainant) in fact handed over the cheque to him in his capacity as servant & agent of Ladharam Kheta. Therefore, the offence, if any, would fall under S. 405, I. P. C. & be punishable under S. 406, I. P. C.

7. In every offence of criminal breach of trust, what must be established initially is the fact of entrustment of money or property. The learned counsel for the applicant, relying on the decision in 'Emperor v. Ghanshamdas,1928 AIR(Sind) 106', , contends that the expression ''entrusted'' in S. 405 I. P. C. is used in its legal & not in its figurative or popular use. A different view, however, has been taken in ' Emperor v. J. McIver, 1936 AIR(Mad) 1, by a Bench of that Court of which Sir Madhavan Nair, who is now on the Judicial Committee of the Privy Council, was one of the members. According to this decision, the word ''entrusted'' in section 405 I. P. C. is not necessarily a term of law & that it may have different implications in different contexts. The view of the Madras High Court is, therefore, entitled to great respect & I would accept it in preference to that taken by the Sind Court.

8. Even so, it is clear that when money is entrusted to an accused person, it should be transferred to him under such circumstances which show that, notwithstanding its delivery, the property in it continues to vest in the prosecutor & the money remains in the possession or control of the accused as a bailee, & in trust for the prosecutor as bailor, to be restored to him or applied in accordance with, his instructions. This view has been taken in the Sind case I have just referred to & also in ' Ram Khelawan v. Emperor, 1919 AIR(Pat) 457', , & with great respect I agree with it.

9. Assuming the prosecution allegation that the cheque was handed over to the applicant himself to be true, does it follow that this constituted an entrustment of money to him? Under S. 46, Negotiable Instruments Act, the making of a cheque is complete as soon as it is delivered by the drawee to the payee. The delivery may be actual or constructive. As held in ' Sinnachami v. Ramaswami, 1939 AIR(Mad) 858, the delivery need not be to the person whose name is written on. the cheque or even to any agent authorised by the person nam