IPC Section 409: Criminal breach of trust by public servant, or by banker, merchant or agent.

IPC Section 409, 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. 

Meaning

Criminal breach of trust according to section 409 IPC, is a type of betrayal when a public servant holding property or dominion over another’s property has dishonestly misappropriated or converted such property for his own use, or has, by lawful or unlawful contract with respect to the property done such activities. Section 409 applies when breach of trust is committed by persons in a fiduciary type role or authority such as banker, merchant, factor, broker, attorney or agent. 

Punishment

• Section 409 allows for punishment of imprisonment for life, or for term which may extend to 10 years, and, with a fine. 

Essential Elements

To establish guilt under Section 409, three essential elements must be demonstrated:

1. Relationship of trust: The accused must be a public servant, banker, merchant, factor, broker, attorney or agent. This legal relationship gives the accused the position of control or dominion over the property.
2. Entrustment of property: The property is being provided to the accused in their official or public capacity. Without the requirement for the accused’s trust, they not liable under this section of law.
3. Criminal breach of trust: The accused must have dishonestly misappropriated, converted or used the property contrary to its legal directions, the terms of the contract, or for personal use. The balance struck in establishing the breach of trust requires dishonest intention, mere negligence or lack of performance is not enough.

Illustration

• A depositor entrusts money to a bank, if the banker acting with dishonest intention diverts the depositor’s money, for their personal use, the banker commits breach of trust by misappropriating the deposit under section 409. 
• Likewise, if a public servant is entrusted government money and then subsequently misuses that money for personal use, they would also commit breach of trust under section 409.

Landmark Case Law

• R. Venkatkrishnan v. CBI (2009): The Supreme Court ruled that bank officials who were misappropriating the depositors’ money were guilty under Section 409.
• Jaswantrai Manilal Akhaney v. State of Bombay (1956): The Court ruled that bankers owe fiduciary duty and a breach of that duty will constitute an offence under Section 409.
• Somnath Thapa v. State of Maharashtra (1996): The Court said that entrustment and dishonest intention are both essential to establish liability.

FAQs on IPC Section 409