When breach of trust will be civil wrong and when it will be criminal offence?

 Every act of breach of trust may not be resulted in a penal offence
of criminal breach of trust unless there is evidence of manipulating act of
fraudulent misappropriation. An act of breach of trust involves a civil
wrong in respect of which the person may seek his remedy for damages
in civil courts but any breach of trust with a  mens rea  gives rise to a
criminal prosecution as well. 
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
FIR/ORDER) NO. 7630 of 2015

PARTHKUMAR RAMNIKLAL KALAVADIYA & 
V
STATE OF GUJARAT & 1.

CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
Date : 09/12/2016

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Whether breach of trust without dishonest intention is offence?

In my opinion no charge is made out against Rangi Lal under Section 408, I.P.C. It should be borne in mind that mere retention of money or mere failure to return it does not necessarily raise a presumption of dishonest misappropriation. The mere fact that the payment was delayed is no ground for imputing a criminal intention. Though the ingredients of the offence of criminal breach of trust are somewhat broadly stated, there is no doubt as to their meaning. The sections dealing with the offence of criminal breach of trust were intended to punish an offence of which dishonesty is the essence. Any breach of trust is not an offence, lt may be intentional without being dishonest or it may appear dishonest without being really so.

Equivalent Citation: AIR1930Oudh321, (1931) ILR 6 LUCK 68,1931 CRLJ1678

IN THE HIGH COURT OF OUDH

Decided On: 08.04.1930

 Rangi Lall  Vs.  Emperor

Coram: Raza, J.

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What are essential ingredients of criminal breach of trust?

The other aspects have also been considered by the Supreme Court on numerous occasions. In 2002 SCC (Cri) 129 (S.W. Palanitkar and others Vs. State of Bihar and another) the Supreme Court held that without mens rea a breach of trust may not result in criminal breach of trust. Every breach of trust may not result in penal offence of criminal breach of trust unless there is evidence of a mental act of fraudulent misappropriation. An act of breach of trust involves a civil wrong, in respect of which the person wronged may seek his redress for damages in a civil court, but a breach of trust with mens rea gives rise to a criminal prosecution as well. 

In (2003) 7 SCC 399 (Kailash Kumar Sanwatia Vs. State of Bihar and another) the Supreme Court held that following ingredients of offence are to be treated as criminal breach of trust; 

(1) Entrusting any person with property, or with any dominion over property. 

(2) The person entrusted (a) dishonestly misappropriating or converting to his own use that property; or (b) dishonestly using or disposing of that property or wilfully suffering any other person so as to do in violation- 

(i)of any direction of law prescribing the mode in which such trust is to be discharged; or 

(ii)of any legal contract made touching the discharge of trust. 

In AIR 1983 SC 631 (Roshan Lal Raina Vs. State of Jammu and Kashmir), we found that proof of entrustment is the basic ingredient for the proof of guilty of offence of criminal breach of trust. However, such reference is arising out of Section 409 R.P.C. 

ALLAHABAD HIGH COURT

Criminal Misc. Writ Petition No. 11675 of 2005. 

Pradeep Agrawal alias Sappu. 

Vs

State of U.P. through Secretary, 

(Home), Lucknow and others 

Present: 

(Hon'ble Mr. Justice Amitava Lala and Hon'ble Mr. Justice Shiv Shanker) Dated:21st December, 2005. 

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Whether it is mandatory for a party pleading fraud to state particulars thereof with dates?

The unfair advantage or the hardship contemplated 

under Section 20 has to be seen   as working against the defendant and not the 
plaintiff.     There   are     no     circumstances   either   making   enforcement   of   specific 
performance of the contract as inequitable.  For these reasons,  this case cannot be 
seen to be  falling  in any of  the instances mentioned in clauses (a)to (c)  of sub­
section (2) of Section 20 of Specific Relief Act. Then, no details of pending litigations 
have been given so as to make out the  case that  the defendant was cheated into 
signing stamp papers,  as required under Order VI Rule 4 of Code of Civil Procedure. 

Order VI Rule 4 makes it mandatory for a party pleading fraud, misrepresentation, 
breach of trust, wilful default or undue influence, to state the particulars thereof 
with dates and items and so on.  This is because to put the other side on sufficient 
notice of the case it has to meet.  Here, neither the particulars nor any evidence has 
been adduced in regard to the pending litigations, dates etc. to make out the case of 
misuse of stamp papers.  I, therefore, find   no substance in the arguments canvassed 
in this regard on behalf of the defendant and find merit in the argument of learned 
counsel for the plaintiff.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
SECOND APPEAL No. 342  OF 1989
Chintaman Sitaram Bajad (DEAD)   
   VERSUS
Shankar Sonaji Shingne   

CORAM :   
 S.B. SHUKRE, J.
             DATE :     JANUARY 07, 2014.
        
   Citation; 2014 (2) ALLMR 156 Bombay

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