Searching Case Laws & Precedent on Legal Query..!
Scanned Judgements…!
Searching Case Laws & Precedent on Legal Query..!
Scanned Judgements…!
Money and Section 406 IPC - Main Points and Insights
The offence under Section 406 IPC pertains to criminal breach of trust, which requires the elements of entrustment of property and dishonest misappropriation or conversion ["K. Nirmala Reddy vs The State of Telangana - Telangana"]. Several cases emphasize that for Section 406 to be invoked, there must be clear evidence of entrustment and breach of that trust ["BRIJ MOHAN PAINULY vs STATE OF UTTARAKHAND - Uttarakhand"], ["Shushant Kumar Patnaik @ Susant Kumar Pattanaik VS State of Jharkhand - Jharkhand"].
Courts also note that criminal proceedings should not be initiated on civil disputes or where there is no clear proof of dishonesty or breach of trust ["BRIJ MOHAN PAINULY vs STATE OF UTTARAKHAND - Uttarakhand"], ["Sanjiv Nandan Sahai, son of late Kedar Nandan Sahai VS State of Jharkhand - Jharkhand"].
Analysis and Conclusion
The core requirement for prosecution under Section 406 IPC is the proof of entrustment of property or money and subsequent dishonest misappropriation. Without establishing these elements, cases are often quashed or dismissed.
References:
In the realm of Indian criminal law, financial disputes often blur the lines between civil remedies and criminal liability. A common query arises: money + subject matter of 406 IPC—can money be considered the 'property' entrusted under Section 406 of the Indian Penal Code (IPC), triggering charges of criminal breach of trust? This question is pivotal for individuals, businesses, and legal practitioners navigating loan recoveries, contractual breaches, or investment disagreements.
Typically, courts scrutinize whether mere failure to repay money constitutes a criminal offence or remains a civil matter. This blog post delves into the legal nuances, drawing from judicial precedents and statutory interpretations to provide clarity. Note: This is general information and not specific legal advice. Consult a qualified lawyer for your situation.
Section 406 IPC punishes criminal breach of trust, defined under Section 405 as dishonest misappropriation or conversion of property entrusted to the accused. The provision states: whoever, being in any manner entrusted with property, dishonestly misappropriates or converts it for their own use commits the offence Bid & Hammer Fine Art Auctioners (P) Ltd. through Chairman VS State Of U. P through its Home Secretary - 2019 0 Supreme(All) 1858.
Key to invoking Section 406 is recognizing money as 'property'. Courts affirm that movable property, including currency, qualifies as 'property' under IPC explanations. However, not every handling of money triggers liability—specific ingredients must be met Manish Kumar VS State of Bihar - 2018 0 Supreme(Pat) 1140.
Without these, allegations collapse, as seen in cases where ownership disputes negate entrustment: The subject property belongs to them and they had rights over it as owners with title. Thus, the very foundation for invoking Section 406 of the IPC falls to the ground Pruthvi Honnegowda, S/o Sri M.Honnegowda vs State Of Karnataka - 2025 Supreme(Online)(Kar) 20792.
Financial dealings like loans or advances frequently lead to Section 406 complaints. Yet, courts consistently hold that breach of contract or failure to repay does not automatically equal criminal breach of trust. For instance:
Another ruling emphasized: such civil dispute ought not to have been treated as an offence under Section 406 of IPC Sizoll Chemicals Pvt. Ltd. VS Assent Chmicals Limited - 2024 Supreme(Gau) 1710, quashing a case where partial repayment and a parallel money suit indicated civil nature.
Courts demand prima facie evidence at initial stages without deep evidence scrutiny Satishchandra Ratanlal Shah VS State of Gujarat - 2019 3 Supreme 204. Notable cases:
In contrast, where charges specify entrustment, of collecting money and dishonest misappropriation of such money, they suffice if particulars meet CrPC Section 212 Rakesh Deepak Shukla VS State of U. P. - 2019 Supreme(All) 670.
Section 406 is a continuing offence, allowing proceedings beyond standard limitation if misappropriation persists Balram Singh VS Sukhwant Kaur - 1991 0 Supreme(P&H) 317. However, core elements—entrustment and dishonesty—remain mandatory. Without them, quashing follows regardless Balram Singh VS Sukhwant Kaur - 1991 0 Supreme(P&H) 317.
High Courts invoke inherent powers (CrPC Section 482) to quash frivolous Section 406 cases masquerading as civil disputes:
This safeguards the justice system from weaponization in monetary disagreements.
Proceedings stand if:- Clear entrustment occurs, e.g., advance for specific goods with diversion Sizoll Chemicals Pvt. Ltd. VS Assent Chmicals Limited - 2024 Supreme(Gau) 1710.- Dishonesty proven, like fabricating documents or false assurances C. R. Jaison S/o Rappai VS Jolly Stephen S/o Charly - 2021 Supreme(Ker) 95.- Ongoing schemes involving investor funds, though bail may consider double jeopardy PRASHANT KUMAR DASH VS STATE OF ODISHA - 2017 Supreme(Ori) 1466.
The charge further mentions about ingredients of section 405/406 IPC such as entrustment, of collecting money and dishonest misappropriation of such money—valid if detailed Rakesh Deepak Shukla VS State of U. P. - 2019 Supreme(All) 670.
Legal practitioners should emphasize: Courts should scrutinize the nature of the dispute to distinguish civil breaches from criminal offences, especially in cases involving loans, contractual obligations, or civil transactions.
In summary, while money can be the subject matter of Section 406 IPC, courts demand strict adherence to entrustment and dishonesty. Financial disputes are generally civil unless criminal intent shines through. Stay informed, seek professional advice, and avoid conflating debts with crimes.
References (select judicial documents):- Manish Kumar VS State of Bihar - 2018 0 Supreme(Pat) 1140, Bid & Hammer Fine Art Auctioners (P) Ltd. through Chairman VS State Of U. P through its Home Secretary - 2019 0 Supreme(All) 1858, Riju Samanta VS State of Assam - 2012 0 Supreme(Gau) 1249, Balram Singh VS Sukhwant Kaur - 1991 0 Supreme(P&H) 317, Satishchandra Ratanlal Shah VS State of Gujarat - 2019 3 Supreme 204, Pruthvi Honnegowda, S/o Sri M.Honnegowda vs State Of Karnataka - 2025 Supreme(Online)(Kar) 20792, Sizoll Chemicals Pvt. Ltd. VS Assent Chmicals Limited - 2024 Supreme(Gau) 1710, Jet Knitears Ltd Manufacturers of Exports Quality Undergarments through Director Ankur Narula VS State of Bihar through S. P. Patna, Bihar - 2024 Supreme(Pat) 235, C. R. Jaison S/o Rappai VS Jolly Stephen S/o Charly - 2021 Supreme(Ker) 95, Rakesh Deepak Shukla VS State of U. P. - 2019 Supreme(All) 670.
#IPC406, #CriminalBreachTrust, #LegalInsights
is necessary to attract Section 406 IPC. ... The offences registered are under Sections 420, 406 and 120(B) of IPC. The Hon’ble Apex Court while dealing with Sections 420 and 406 of IPC in Delhi Race Club (1940) Limited and others v. ... It is alleged that respondent No.2 requested accused No.1 to register the subject property in his favour and that accused Nos.1 and 2 were dragging the matter. 6. ... O.S.No.441 of 2014 came to be filed by one M.Srin....
There is no assertion that the money was entrusted for a specific purpose, nor any indication that the Applicants had dominion over such money in any fiduciary or special capacity. Absence of entrustment is fatal to the invocation of Section 406 IPC. 14. ... It was urged that even if the complaint is taken at its face value, no act of entrustment is alleged so as to attract Section 406 IPC. ... The Supreme Court has consistently held that where the dispute relates to payment or refund ....
to Sections 406 and 471 of IPC. ... The learned counsel further submitted that the matter relates to defalcation of public money and therefore, the petitioner does not deserve any lenient view. 10. ... Case No.60/2010 dated 20.08.2010 was instituted for offence under Sections 406, 467, 468 and 471 of IPC. ... The learned counsel further submitted that the appellate court while upholding the conviction of the petitioner has not considered the aforesaid aspects of the matter#HL....
The subject property belongs to them and they had rights over it as owners with title. Thus, the very foundation for invoking Section 406 of the IPC falls to the ground. 40. ... The offences are the ones punishable under Sections 406 and 420 of the IPC. They read as follows: “406. Punishment for criminal breach of trust. ... laid allegations against the petitioner for the offences under Sections 406 and 420 of the IPC. ... Therefore, the offence und....
Mahajan, learned counsel for the respondent, if the complaint is read as a whole, the same discloses offences under Section 406 of IPC. ... Therefore, such civil dispute ought not to have been treated as an offence under Section 406 of IPC. 7. Mr. ... Case No. 3182/2010 instituted by the sole respondent under Sections 405/406/415/417 of the IPC and the order dated 29.06.2011 passed by the learned Sub-Divisional Judicial Magistrate-I, Kamrup at Guwahati whereby cognizance of offences un....
Thus, the truth is yet to be unravelled, whether Sections 406 or 420 of IPC get attracted or not cannot be decided at this stage. ... Gadwal (R), Jogulamba Gadwal, registered for the offences under Sections 406, 420 read with 34 of the Indian Penal Code (for short ‘IPC’). 2. Heard the submissions of Sri S. ... Therefore, the allegations under Sections 406 and 420 of IPC do not get attracted against the petitioners. He therefore, prayed to quash the proceedings against....
The entire act was done by the petitioners in collusion with accused nos. 05 and 06 to misappropriate the money of the complainant. In such view of the matter, the petitioners were also held to be liable for proceeding for offence under Section 406 of the IPC. 17. ... makes a civil dispute and not a case under Section 406 of the IPC. ... The complainant failed to make out any case under Section 406/34 of the IPC against the petitioners. 20. ... Accor....
under Section 406/420 IPC is not barred by any of the statutory prescription. ... Act and Section 406/420 IPC on the same set of allegations were filed, and it was held that on the same set of allegations, two different offences i.e. under N.I. Act and under the IPC cannot be proceeded with, and proceeding under Section 406/420 IPC is liable to be quashed. ... , reported in 2000 2 SCC 636, a subsequent complaint filed under Section 406/420 #HL_START....
The law clearly recognises a difference between simple payment/investment of money and entrustment of money or property. ... IPC. ... and 420 of Indian Penal Code and therefore, the learned Judicial Magistrate 1st Class, Jamshedpur has not committed any illegality in finding prima facie case for the offence punishable under Sections 406 and 420 of Indian Penal Code against the petitioners. ... Under such circumstances, this Court has not hesitation in holding that the offence punishabl....
The law clearly recognizes a difference between simple payment/investment of money and entrustment of money or property. ... The offences alleged are under Sections 406/420/120B of the Indian Penal Code. 19. ... of IPC. ... Section 406 of the Indian Penal Code, lays down:- “406. Punishment for criminal breach of trust.—Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to thr....
Even if it is accepted that the petitioner had subsequently instituted the suits, it does not undo the offence, if any, committed by him. Even temporary misappropriation of money would attract the offence punishable under Section 406 of the Indian Penal Code.
Even if it is accepted that the petitioner had subsequently instituted the suits, it does not undo the offence, if any, committed by him. Even temporary misappropriation of money would attract the offence punishable under Section 406 of the Indian Penal Code.
The charge further mentions about ingredients of section 405/406 IPC such as entrustment, of collecting money and dishonest misappropriation of such money. Therefore, the charge has complete particulars which are "reasonably sufficient" for the purpose of notice as required in section 212 (1) Cr.P.C. In terms of section 212 Cr.P.C. the charge in question clearly mentions about person, place and time.
406/420/467/468/471/506/120-B, IPC and Sections 4, 5 and 6 of the Prize Chits Money Circulation Scheme (Banning) Act, 1978 against the present petitioner along with others as accused in all the three cases pending on the file of learned C.J.M., Jeypore. This common order shall dispose of the mentioned three bail applications arising out of three cases vide G. R. Case No. 306 of 2013 corresponding to Semiliguda P.S. Case No. 32 of 2013, G.R. Case No. 324 of 2013 corresponding to Koraput Town P. S. Case No. 49 of 2013 and G. R. Case No. 369 of 2013 corresponding to Jeypore To....
120B/406/420/468 IPC and launched investigation into the matter. 8. On receipt of the said complaint, the O/C, Jalukbari P.S. registered the same as Jalukbari P.S. Case No. 25/2014, under Sections
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
