Section 406 of the Indian Penal Code, 1860, which prescribed punishment for criminal breach of trust, has been replaced by Section 316 of the Bharatiya Nyaya Sanhita, 2023, effective 1 July 2024. The BNS consolidates the definition (formerly IPC Section 405) and punishment provisions (formerly IPC Sections 406-409) into a single section with graded sub-sections. The maximum punishment for simple criminal breach of trust has been increased from three years to five years, and aggravated forms involving carriers, clerks, servants, public servants, bankers, merchants, and agents are classified with greater structural clarity.
What changed
| Old law | New law | |
|---|---|---|
| Act | Indian Penal Code, 1860 | Bharatiya Nyaya Sanhita, 2023 |
| Section | 405 (definition), 406 (punishment), 407 (carrier), 408 (clerk/servant), 409 (public servant/banker/agent) | 316 (consolidated — definition and all punishment tiers) |
| Title | Criminal breach of trust — separate definition and punishment | Criminal breach of trust — unified provision |
| Change type | Modified — consolidated, punishment enhanced from 3 to 5 years, graded sentencing for aggravated forms |
Full statutory text
Section 405 IPC — Criminal breach of trust (definition, repealed w.e.f. 1 July 2024)
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."
Section 406 IPC — Punishment (repealed w.e.f. 1 July 2024)
Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.
Section 316 BNS — Criminal breach of trust
(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.
(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. [Corresponds to Section 407 IPC]
(4) Whoever, being a clerk or servant or employed as a clerk or servant, and being in any manner entrusted with property or with any dominion over property, commits criminal breach of trust, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine. [Corresponds to Section 408 IPC]
(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, 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. [Corresponds to Section 409 IPC]
Text in bold represents provisions where punishment has been enhanced compared to the IPC.
Key differences
Punishment for simple breach increased: IPC Section 406 prescribed a maximum of three years imprisonment for simple criminal breach of trust. BNS Section 316(2) raises this to five years, reflecting the legislature's view that breach of fiduciary obligations warrants stricter deterrence.
Consolidation of five sections into one: IPC dealt with criminal breach of trust across five sections — definition (405), simple punishment (406), carrier/wharfinger (407), clerk/servant (408), and public servant/banker/agent (409). BNS Section 316 combines all five into a single provision with graded sub-sections.
Graded sentencing structure: The BNS creates a clear hierarchy — simple breach (5 years), carrier/wharfinger/clerk/servant breach (7 years), and public servant/banker/merchant/agent breach (life imprisonment or 10 years). This graded approach allows courts to calibrate sentencing based on the gravity and position of trust occupied.
Aggravated category punishments retained: The punishment for criminal breach of trust by a carrier, wharfinger, or warehouse-keeper (7 years), by a clerk or servant (7 years), and by a public servant, banker, merchant, or agent (life imprisonment or 10 years) remains unchanged from the corresponding IPC provisions.
Structural clarity: By placing the definition and all punishment tiers within a single section, the BNS eliminates the need to cross-reference between IPC Sections 405-409, simplifying citation practice.
What this means for practitioners
For drafting and citations: All FIRs and charge sheets for criminal breach of trust committed on or after 1 July 2024 must cite the specific sub-section of BNS Section 316 that applies. Simple breach requires citing Section 316(2); breach by carrier/wharfinger requires 316(3); breach by clerk/servant requires 316(4); and breach by public servant/banker/agent requires 316(5).
For pending cases: Offences committed before 1 July 2024 continue under IPC Sections 405-409. The enhanced punishment under BNS Section 316(2) — five years instead of three — cannot be applied retrospectively to offences committed under the old law.
For new cases: The increase from three to five years for simple criminal breach of trust has bail implications. Practitioners should note that the offence remains bailable under the BNSS but the higher maximum sentence may influence judicial discretion on bail conditions.
For distinguishing from cheating: Practitioners must continue to distinguish criminal breach of trust from cheating (BNS Section 318). In breach of trust, the accused was lawfully entrusted with property and subsequently misappropriated it. In cheating, the intention to deceive existed from the inception. The two offences cannot co-exist on the same set of facts.
Does old case law still apply?
The jurisprudence on criminal breach of trust developed under IPC Sections 405-409 remains fully applicable to BNS Section 316, as the core definition is retained verbatim.
R.K. Dalmia v. Delhi Administration AIR 1962 SC 1821 — The Supreme Court held that "entrustment" under Section 405 IPC includes not only express entrustment but also entrustment arising by virtue of a legal obligation or dominant position over the property. This interpretation continues under BNS Section 316(1).
Jaswantrai Manilal Akhaney v. State of Bombay AIR 1956 SC 575 — The Court held that the dishonest misappropriation must be of the very property entrusted, and the prosecution must establish a clear nexus between the entrustment and the misappropriation. This foundational principle continues to govern BNS Section 316.
Rashmi Kumar v. Mahesh Kumar Bhada (1997) 2 SCC 397 — The Court distinguished between criminal breach of trust and a mere civil dispute over property, holding that a pure contractual dispute does not attract criminal prosecution. This distinction remains vital under the BNS.
Judicial interpretation under BNS 316 (post-July 2024)
No post-July 2024 Supreme Court or Delhi High Court cases directly citing BNS Section 316 (criminal breach of trust) were found in the Veritect database. The available cases continue to adjudicate under IPC Sections 405-409 because the underlying offences pre-dated 1 July 2024.
Emerging patterns
Based on the statutory framework and early practice, the initial approach suggests:
- Enhanced punishment will affect bail practice: The increase from three to five years for simple criminal breach of trust under BNS Section 316(2) may influence bail conditions and judicial discretion, particularly in commercial disputes where breach of trust is alleged.
- Distinction from cheating remains critical: The BNS retains criminal breach of trust (Section 316) and cheating (Section 318) as distinct offences. The Supreme Court's established test — timing of dishonest intention — will continue to govern whether a case falls under Section 316 (lawful entrustment followed by dishonest misappropriation) or Section 318 (deceptive intention from inception).
- Consolidated sub-section citation practice developing: Practitioners filing FIRs under BNS Section 316 will need to cite the specific sub-section — 316(2) for simple breach, 316(3) for carriers/wharfingers, 316(4) for clerks/servants, and 316(5) for public servants/bankers/agents — rather than the standalone section numbers that existed under the IPC.
Frequently asked questions
What is the BNS equivalent of Section 406 IPC? Section 316(2) of the Bharatiya Nyaya Sanhita, 2023, is the direct equivalent of Section 406 IPC. The maximum punishment has been increased from three years to five years imprisonment.
Has the punishment for criminal breach of trust changed in BNS? Yes. Simple criminal breach of trust now carries a maximum of five years imprisonment under BNS Section 316(2), up from three years under IPC Section 406. The punishment for aggravated forms (carrier, clerk, public servant, banker) remains unchanged.
Can criminal breach of trust and cheating be charged together? The Supreme Court has consistently held that criminal breach of trust and cheating are distinct offences that cannot co-exist on the same facts. In breach of trust, the accused was lawfully entrusted with property; in cheating, the intention to deceive existed from the start. This principle continues under BNS Sections 316 and 318.
Is criminal breach of trust bailable under BNS? Simple criminal breach of trust under Section 316(2) BNS remains a bailable offence. However, aggravated forms involving public servants under Section 316(5), which carry life imprisonment, may be non-bailable depending on judicial determination.