To deal with criminal breach of trust, we have provisions under Indian Penal Code.Ĭhapter XVII of IPC deals with offences against property and Section 405 to 409 of IPC deals with criminal breach of trust. In the same case, If B misappropriates the property for his own benefit, say, he sells the property and flee with money, he commits criminal breach of trust. The criminal breach of trust is punishable with imprisonment along with fine.įor example: ‘A’ creates a trust for benefit of his children and appoints ‘B’ as his trustee and direct him to manage the trust property for maintenance of A’s children. Merely giving property to another for care will result in criminal breach of trust if the trustee misappropriates that property dishonestly. There is no need to create a trust as required under Indian Trust Act. Under civil law, mere omission to perform any duty amounts to civil breach of trust. So dishonest intention on the part of trustee makes the breach a criminal breach of trust. If the trustee acts dishonestly and misappropriates the trust property for his own benefit, he is said to commit criminal breach of trust. To constitute criminal breach of trust, mens rea on the part of trustee is essential. In civil breach of trust, he is liable to compensate the trustor or the beneficiary for the loss occurred to trust property owning to trustee’s negligence. Trust created under the Act consists of a trustor (one who creates trust), beneficiary (for whose benefit the trust is created) and the trustee( one who holds the trust property).Ī trustee commits civil breach of trust if he omits to perform any duty which assigned to him as provided under the Act like protecting the title of trust property, investment of trust money etc and to work according to the directions of the trustor in the best interest of the beneficiary. The creation of private trust, trustee, duties, and liabilities of trustee are governed by Indian Trust Act, 1882. So, to curb these practices, we have legal provisions under IPC, 1860.īreach of trust may be civil or criminal. Breach of trust by the trustee may pose problems for the trustor, he may never dare to give his property in trust. Under civil law, trust is formed for benefit of someone. Then the trustee is said to commit breach of trust since he has broken the confidence reposed in him by the true owner.įor example, ‘A’ appoints ‘B’ as the trustee of his property for the benefit of his minor grandson, if B uses the property for his own benefit, he is said to commit breach of trust. But as greed is innate quality of human beings, the trustee may misappropriate that property for his own use. It is defined as trustee’s inability to fulfil the duties placed on him by the trust’s agreement or by general law in respect to the trust’s property or beneficiaries.įor example, opening accounts in trust for benefit of one’s children. ![]() When the trustee defaults in the above mentioned duty and goes against the terms of the agreement, he is said to commit breach of trust. A trustee is usually a person who stands in fiduciary capacity to the real owner. He is expected to perform his duty honestly and to act in such way as he may be directed by the real owner and in absence of any such directions, he must act prudently. ![]() The one who is responsible to take care or manage such property is called trustee. ![]() The owner of a property may entrust his property to another person for some specific purpose like protection, care of the property etc.
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