Section 316 BNS: Criminal breach of trust Meaning, Punishment & Full Analysis

Section 316 of the Bharatiya Nyaya Sanhita (BNS) 2023 is a key provision dealing with the offence of criminal breach of trust. It criminalizes any dishonest misappropriation or misuse of property entrusted to a person. Whether it is cash, goods, or movable assets, misuse for personal gain without authorization falls under this offence.

Earlier, multiple sections in IPC (405–409) covered such acts. Now, section 316 of BNS simplifies these concepts under a single, organized framework. It imposes strict penalties depending on who commits the offence, like clerks, public servants, bankers, merchants, or warehouse-keepers.

Understanding section 316 BNS punishment, section 316 BNS is bailable or not, and how criminal breach of trust meaning applies to real situations is important today. This article explains sec 316 BNS in detail, covers its text, interpretation, essential elements, nature, scope, comparison with IPC, judicial views, landmark cases, and impact on society.  Explore other important Judiciary Notes.

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.

Explanation 1.—A person, being an employer of an establishment whether exempted under section 17 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) or not who deducts the employee’s contribution from the wages payable to the employee for credit to a Provident Fund or Family Pension Fund established by any law for the time being in force, shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said law, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.

Explanation 2.—A person, being an employer, who deducts the employees’ contribution from the wages payable to the employee for credit to the Employees’ State Insurance Fund held and administered by the Employees’ State Insurance Corporation established under the Employees’ State Insurance Act, 1948 (34 of 1948) shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said Act, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.

Illustrations.

(a) A, being executor to the will of a deceased person, dishonestly disobeys the law which directs him to divide the effects according to the will, and appropriates them to his own use. A has committed a criminal breach of trust.

(b) A is a warehouse-keeper Z going on a journey, entrusts his furniture to A, under a contract that it shall be returned on payment of a stipulated sum for warehouse room. A dishonestly sells the goods. A has committed criminal breach of trust.

(c) A, residing in Kolkata, is agent for Z, residing at Delhi. There is an express or implied contract between A and Z, that all sums remitted by Z to A shall be invested by A, according to Z’s direction. Z remits one lakh of rupees to A, with directions to A to invest the same in Company’s paper. A dishonestly disobeys the directions and employs the money in his own business. A has committed a criminal breach of trust.

(d) But if A, in illustration (c), not dishonestly but in good faith, believing that it will be more for Z’s advantage to hold shares in the Bank of Bengal, disobeys Z’s directions, and buys shares in the Bank of Bengal, for Z, instead of buying Company’s paper, here, though Z should suffer loss, and should be entitled to bring a civil action against A, on account of that loss, yet A, not having acted dishonestly, has not committed criminal breach of trust.

(e) A, a revenue-officer, is entrusted with public money and is either directed by law, or bound by a contract, express or implied, with the Government, to pay into a certain treasury all the public money which he holds. A dishonestly appropriates the money. A has committed criminal breach of trust.

(f) A, a carrier, is entrusted by Z with property to be carried by land or by water. A dishonestly misappropriates the property. A has committed 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.

(4) Whoever, being a clerk or servant or employed as a clerk or servant, and being in any manner entrusted in such capacity with property, or with any dominion over property, commits criminal breach of trust in respect of that 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.

(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 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.

Note: "The information provided above has been sourced from the official website, i.e., Indian Code. While the content has been presented here for reference, no modifications have been made to the original laws and orders" 

Free Download PDF on Section 316 BNS

Section 316 of BNS clearly explains what amounts to criminal breach of trust meaning . If someone is entrusted with property and they misuse it dishonestly for their own benefit or in violation of a law or contract, they commit a punishable crime.

Entrustment is the first key — it means being trusted with someone else's property with a duty to protect it. Misappropriation must happen with dishonest intention.

Examples under section 316 of BNS include:

• An employer deducting employee Provident Fund contributions but not depositing them.
• A warehouse owner dishonestly selling goods entrusted for storage.

The section punishes offenders differently based on their position:

• General individuals: Up to five years or fine.
• Carriers or warehouse-keepers: Up to seven years.
• Clerks or servants: Up to seven years.
• Public servants and bankers: Life imprisonment or up to ten years.

Thus, section 316 BNS punishment is proportional to the level of trust breached.Queries like section 316 BNS is bailable or not arise often. Offences under sec 316 BNS are non-bailable if committed by public servants or bankers, reflecting the serious breach of societal trust.This law protects fiduciary trust and ensures accountability in both personal and professional relationships.

Section 316 BNS : Key Aspects 

Section 316 of the Bharatiya Nyaya Sanhita (BNS) addresses the crime of criminal breach of trust. This occurs when someone entrusted with property or dominion over property dishonestly misappropriates, converts, uses, or disposes of it, violating a legal direction or contract. It essentially covers situations where someone entrusted with something valuable uses it improperly or dishonestly. Key aspects of Section 316 are as under :

• Entrustment:
  The core element is that the person must be entrusted with property or have dominion over it.
• Dishonest Misuse:
  The entrusted property or dominion must be misused in a dishonest manner, meaning using it for personal gain or violating a legal obligation.
• Examples:
  This section covers scenarios like an employer not paying employee contributions to a provident fund, or a carrier dishonestly misusing entrusted goods, according to ezyLegal and bharatiyanyayasanhita.online.
• Punishment:
  The punishment for criminal breach of trust can range from imprisonment of up to five years, or fine, or both, according to ezyLegal and Devgan.in.
  For clerks or servants, it can extend to seven years, and for public servants, punishment can be life imprisonment or up to ten years, along with a fine.

To convict someone under section 316 BNS, these essential elements must be present and some of them are provided as under :

• Entrustment:
  The accused must have been entrusted with property or dominion over it.
• Dishonest Misuse:
  The property must be misused dishonestly, not by mistake.
• Violation of Trust:
  Misuse must breach a legal obligation, contract, or fiduciary duty.
• Intention:
  The accused must have intended to cause wrongful gain to themselves or wrongful loss to another.

Thus, both the act of misuse and the dishonest intention must be proven. Without dishonest intent, it becomes a civil breach, not a criminal breach of trust .

Section 316 BNS : Nature and Scope 

Section 316 BNS 2023 treats criminal breach of trust as a cognizable offence — police can arrest without a warrant — and a non-bailable offence for serious breaches, particularly by public servants.

When asked section 316 2 BNS bailable or non bailable, the answer is:

• For general theft of trust, it may be bailable in minor cases.
• For clerks, servants, and especially public servants or bankers, it is non-bailable.

The scope of section 316 BNS includes:

• Employers
• Public officers
• Bank managers
• Clerks
• Agents and brokers
• Warehouse owners and carriers

The section balances between punishing betrayal of trust severely while giving courts discretion for first-time or minor breaches.

Comparison Table: Section 316 BNS vs IPC Sections

Before BNS, similar conduct was covered under Indian Penal Code (IPC). The transition to Section 316 BNS preserved the structure while fitting into the reformed legal framework under the Bharatiya Nyaya Sanhita.

Feature	IPC Sections 405–409	Section 316 BNS 2023
Definition	Spread across several sections	Consolidated in Section 316
General Punishment	Up to 3 years	Up to 5 years
Public Servants' Punishment	Up to 10 years	Life imprisonment or up to 10 years
Clerk/Servant Punishment	Up to 7 years	Up to 7 years
Cognizability	Cognizable offence	Cognizable offence
Bailability	Varies	section 316 BNS is bailable or not depends
Court Jurisdiction	Magistrate	Same (first-class magistrate or sessions)

Section 316 BNS : Judicial Interpretation

Courts have interpreted criminal breach of trust narrowly to prevent misuse. The courts emphasize following points :

• Entrustment must be proven.
• Dishonest misappropriation must occur.
• Violation of duty or contract must exist.

In State of Gujarat v. Jaswantlal Nathalal (1968), the Court ruled that failure to return goods is not enough unless dishonesty is proven.

In R.K. Dalmia v. Delhi Administration (1962), the Court held that entrustment and misuse must both occur together.

Thus, courts view section 316 of BNS seriously but cautiously, ensuring genuine cases of trust betrayal are punished without criminalizing ordinary contract disputes.

Section 316 BNS :Landmark Cases

The Indian judiciary has clarified the application of laws similar to section 316 BNS through past rulings under IPC Sections. The landmark Judgments relating to the section are as follows-

1. R.K. Dalmia v. Delhi Administration (1962)

In this important case, the Supreme Court ruled that entrustment is the most critical part of a criminal breach of trust case. The Court said that without proof that the property was entrusted to the accused, no charge under criminal breach of trust can succeed. It also explained that misappropriation must follow entrustment. A person must misuse the property in violation of the terms of trust for section 316 BNS to apply.

2. State of Gujarat v. Jaswantlal Nathalal (1968)

Here, the Supreme Court clarified a major point. It held that just because someone did not return property does not mean they are guilty of a criminal breach of trust. There must be proof of dishonest intention behind the act. Non-return alone, without dishonesty, is a civil wrong, not a crime under section 316 BNS 2023. This judgment helped separate civil disputes from real criminal offences.

3. Cheatle v. State of Tamil Nadu (1979)

In this case, the Court highlighted the difference between civil breaches and criminal breaches. It ruled that a simple violation of a business agreement or contract does not automatically become a criminal breach of trust. To apply sec 316 BNS, there must be clear dishonest misuse of entrusted property. This judgment helped protect honest businessmen and professionals from unnecessary criminal charges.

4. State of Maharashtra v. Mohd. Yakub (1980)

This case of Mohd. Yakub focused on the importance of dishonest intention. The Court said that even if there is dominion over property, unless there is clear dishonesty, there is no criminal breach. The act must show that the accused intentionally caused wrongful loss to another. Without this guilty intention, an accusation under section 316 of BNS will fail.

Section 316 BNS :Impact 

Section 316 BNS 2023 improves clarity, closes gaps in IPC, and ensures better protection of fiduciary relations.The biggest impacts are:

• Stronger penalties for public servants and bankers under section 316 5 BNS.
• Wider coverage of fiduciary relationships.
• Clearer rules about when offences are bailable or not under section 316 2 BNS.
• Faster trials by first-class Magistrates.

Public trust in business, banking, and public administration improves when laws ensure harsh penalties for betrayal.

Conclusion 

Section 316 BNS brings clarity, consolidation, and stronger protection for entrusted property.It covers the true criminal breach of trust meaning — dishonest misappropriation by a person trusted with property. The law punishes serious breaches harshly while allowing leniency in minor or first-time cases.Understanding section 316 BNS punishment, when section 316 BNS is bailable or not, and real examples helps every citizen, employee, and businessman stay aware and act responsibly.Thus, section 316 of BNS, as part of BNS 16, marks a huge step toward modern, transparent, and stricter fiduciary law in India.