Section 406 IPC: Punishment and Criminal Breach of Trust

Section 406 IPC prescribed punishment for criminal breach of trust under the earlier Indian Penal Code.

• Section 406 IPC dealt with the punishment for criminal breach of trust
• Under the IPC, Section 406 provided imprisonment of up to 3 years, or fine, or both
• The IPC was replaced by the Bharatiya Nyaya Sanhita (BNS), 2023, from 1 July 2024
• The corresponding provision for ordinary criminal breach of trust is Section 316(2) of the BNS
• Section 316(2) of the BNS provides imprisonment of up to 5 years, or fine, or both
• Proof of entrustment and dishonest conduct is important in a criminal breach of trust case

The legal provisions applicable to a particular case depend on factors such as when the alleged offence occurred and the circumstances involved

Last updated: October 2026

For an allegation under Section 406 IPC, the circumstances generally need to establish the ingredients of criminal breach of trust.

Entrustment is an important component. A mere dispute over payment, performance, ownership, or contractual obligations does not automatically establish criminal breach of trust.

Section 406 IPC prescribed the following punishment for criminal breach of trust:

• Imprisonment for a term that could extend to 3 years
• Fine
• Both imprisonment and fine

The maximum punishment under the old IPC provision was therefore three years.

However, the legal position changed after the introduction of the BNS.

For offences governed by the BNS, Section 316(2) provides the punishment for ordinary criminal breach of trust. It allows imprisonment for up to 5 years, or fine, or both. The applicable provision depends, among other factors, on when the alleged offence occurred and the transition provisions applicable to the case.

Evidence is important in establishing the circumstances surrounding an alleged criminal breach of trust.

Depending on the case, relevant evidence may include:

• Written agreements or contracts
• Receipts and invoices
• Bank statements and transaction records
• Emails, messages, or other communications
• Ownership or custody records
• Delivery documents
• Accounts and financial statements
• Witness statements
• Records showing how entrusted property was used or disposed of

The evidence should help establish the relevant facts, including the existence of entrustment and the alleged dishonest conduct.

A court determines the evidentiary value of each document or statement based on the facts and applicable law.

A person who believes that criminal breach of trust has occurred can provide information about the alleged offence to the police along with relevant supporting documents.

The general process may involve:

1. Prepare a detailed description of the incident.
2. Identify the property allegedly entrusted and explain the circumstances of entrustment.
3. Collect relevant agreements, receipts, financial records, messages, or other evidence.
4. Approach the appropriate police station and provide the information or complaint.
5. Cooperate with the investigation and provide additional documents when requested.
6. Seek appropriate legal remedies if the complaint is not acted upon.

Depending on the circumstances and applicable procedural law, a person may also approach the appropriate senior police authority or court.

A lawyer can help assess the facts, identify the relevant legal provisions, prepare documentation, and advise on available remedies.

Under the earlier IPC framework, the offence punishable under Section 406 IPC was classified as cognizable and non-bailable.

Non-bailable does not mean that bail cannot be granted. It means that bail is not an automatic right and may be granted by the competent authority or court in accordance with the applicable law. For offences under the current BNS framework, the applicable procedural provisions should be checked based on the relevant section and circumstances of the case.Anyone facing an allegation of criminal breach of trust should obtain legal advice promptly rather than relying only on the section number mentioned in a complaint or FIR.

Criminal breach of trust and cheating are different offences, although the facts of a case may sometimes involve allegations of both.

The correct provision depends on the facts of the particular case.

Clear documentation can reduce uncertainty when property or money is entrusted to another person.

Useful precautions include:

• Record the terms of entrustment in writing.
• Clearly identify the property or amount involved.
• Maintain receipts and transaction records.
• Specify the purpose for which property or funds are being handed over.
• Keep copies of important agreements and correspondence.
• Maintain transparent financial records.
• Obtain acknowledgements for valuable property.
• Return entrusted property within the agreed period.
• Communicate promptly if the agreed arrangement changes.
• Seek professional legal advice where the transaction involves significant property or financial obligations.

These measures may help establish the parties' respective rights and responsibilities if a dispute arises later.

Once information about an alleged offence is provided to the authorities, the matter may proceed through investigation and other applicable legal processes.

Depending on the facts, the process can involve:

• Recording of information or registration of an FIR where applicable
• Collection and examination of documents
• Statements from relevant persons
• Investigation of financial or property transactions
• Recovery or identification of relevant property
• Submission of the investigation report to the court
• Court proceedings where the matter proceeds to prosecution