[Sections 403 To 409, P.P.C.]
Criminal misappropriation takes place when the possession has been innocently came by but due to subsequent change of intention or new knowledge the retaining becomes wrongful or fraudulent. (DB) (1988) 15 CI. 388 Bhagiram Dome v. Abar Dome.
Ingredients of Criminal breach of trust: Under Section 4-5, P.P.C. the prosecution must prove: (a) entrustment or dominion over property; (b) the accused dishonestly misappropriated, converted, used or disposed or that property himself or wilfully suffered some other person to do so. When a Naib Patwari collected rent from tenants and handed over the money to Patwari. Held in absence of any suggestion that the accused knew that the money would be misappropriated by the Patwari, the charge of misappropriation against the accused must fail. (SC) PLD 1956 Sc 47 Shakir Hussan PLD 1960 Kar. 926 State v. Sakoor Hashim.
Entrustment of money must be proved. Mere disappearance of money does not prove the guilt. Entrustment and misappropriation both must be proved. NLR 1984 Cr. 477. Syed Nur-ul-Hassan.
"Dishonest intention" is attributable in a case where accused receiving money for construction of roof. Purchased material but misappropriated it alongwith balance of money and disappeared. PLD 1962 Kar. 303 State v. Yousaf Qamar.
Compromise subsequent to commission of breach of trust is ineffective, as offence under Section 406, Penal Code is not commandable. (SC) PLD 1962 Sc 97 Amin Sharif v. Syeda Khatoon.
Misrepresentation: Parting with property as a result of misrepresentation. No question of "entrustment" arises. Case falls under Section 420 and not under Section 406, P.P.C. PLD 1962 Kar. 748 Muhammad Mahmood v. Ghulam Qadir.
Cheque dishonoured: Post-dated cheque given by accused in repayment of money returned by bank dishonoured. Mere fact that the cheque was dishonoured was not sufficient to sustain charge of cheating or criminal misappropriation. PLD 1963 Kar. 54 Saeed-ud-Din Qureshi.
Short delivery of goods: Accused explaining short delivery of goods entrusted to him but circumstances of case suggesting an explanation. Benefit of doubt goes to the accused. (SC) PLD 1962 SC 132 Gias-ud-Din.
Manner of misappropriation: Prosecution is not required necessarily to prove actual manner of misappropriation as well. (DB) PLD 1965 Kar. 155 Addl. A.G., West Pakistan v. Tahir Beg.
Amount not exceeding Rs. 100: Criminal breach of trust in respect of amount not exceeding rupees 100. Offence triable under Conciliation Courts Ordinance, 1961, Ordinary Criminal Court have no jurisdiction to try such offence. PLD 1967 Lah. 65 Muhammad Iqbal. v. Fazal Rehman. Only if all parties agree. (SC) 1969 SCMR 272 Umar Hayat 1969 P.Cr.LJ 748.
Disappearance of property entrusted: Mere disappearance of property entrusted is not sufficient to prove misappropriation unless accused is proved to have done it or had allowed it to be done. 1968 P.Cr.LJ 358 Mustafa Shah.
Mere absence of money is not in all cases sufficient to establish misappropriation. Proof of conversion in such cases is necessary. (SC) PLD 1952 SC 489 Mir Ahmad.
Mere retention of money without evidence of dishonest misappropriation is no offence. PLD 1956 Kar. 212 Khaliq Hussain v. Crown.
Disappearance of paddy entrusted by Food Department to accused for husking. Compensation payable for short delivery under contract does not exclude criminal liability. Conviction under section 407, P.P.C. justified. (SC) 1971 SCMR 116 Faiz-ur-Rehman.
Cheating and entrustment: Act of cheating bears no resemblance with entrustment of property. Offence of cheating cannot also be criminal breach of trust in circumstances of the case. 1971 P.Cr.LJ 1296. Raza Ali.
Trick.When possession is obtained by a trick it cannot be said to be an entrustment. Accused represented to the complainant that he was a tinner while in fact he was not tinner. The complainant handed over some utensils to the accused for tin-plating. The accused neither tinned the utensils nor returned them. Held the accused was guilty of an offence under section 420 and not 406, P.P.C. 1942 Kar. 284 Arab Mian v. King.
Loan is not entrustment and non-payment would not be punishable under Section 406, Penal Code. 13 Cr.LJ 269 Wong Youe Mian v. Emp. (FB) 13 Cr.LJ 888 = 14 Cr.LJ 145 Hock Chong and Co v. Tha Kado.
Property handed over by way of sale but price stipulated to be paid later on. Held, such transfer did not amount to entrustment. 1976 P.Cr.LJ 225 Saleh etc.
Advancing loan without guarantee and without sanction of competent authority. Held, the Bank Manager guilty of offence. But where guarantee was taken but sanction not obtained, held no offence committed. 1976 P.Cr.LJ 235 Raza-e-Panjtan.
Temporary misappropriation: Prosecution is not bound to prove that money received by the accused was actually converted to his own use. (SC) PLD 1959 SC 309 State v. Abu Raza.
Temporary retention: Accused not depositing service revolver in malkhana while going on leave. Case at best of negligence and not of misappropriation 1970 P.Cr.LJ 97 Muhammad Nawaz.
Temporary defalcation: Even temporary defalcation is an offence under Section 409 if other ingredients are made out. 1968 Cr.LJ 1335 Abdul Ghafoor.
Temporary use of property: When there is no intention to cause wrongful gain or wrongful loss and merely an intention to deprive the owner of the property temporarily, dishonesty is not made out. (1886) PR No. 27 of Page 59 Jhandu. v. Emp.
Finder of article, must take steps to find out its true owner, but if on the contrary he takes steps so that the true owner may never be able to trace out his property he is guilty under section 403, P.P.C. 1952 Cr.LJ 904 Ram Bharosey.
Retention of money by mistake. When the mistake comes to the knowledge of the person retaining, is offence under Section 403, P.P.C. (1870) 2 NWP. High Court Reports 475 Sham Sundar v. Emp.
Wrongful loss for a time only to the master constitutes the offence under Section 408. 5 Cr.L 75 Tulsidas v. Emp.
Distinct Offences: Conviction under Section 403 cannot be altered to one under Section 424, PPC as these are distinct offences. PLD 1954 Pesh. 111 Muhammad Ghulam v. Ghulam Sarwar.
Promise to make good the amount alleged to be misappropriated by him is not necessarily an admission of offence. Mere acceptance of a Civil liability to make good an apparent loss of money does not prove that the accused admits the guilt under Section 409, P.P.C. PLD 192 Lah. 648 Abdul Latif v. Crown.
Several persons: Criminal breach of trust by several persons, all must be proved to have been entrusted with money. (DB) PLD 1952 Dac. 354 Abdus Salam v. Crown.
Hire purchase agreement: If a person gets an article under hire purchase agreement and sells it without making full payment to the person from whom hired, he commits criminal breach of trust. 15 Cr.LJ 425 = AIR 1914 LB 175 Maung. Mya Gyi, v. Naga Po. 16 Cr.LJ 665 Moses v. Emp.
Hire: Mere failure to return; without evidence of guilty intention; the goods taken on hire does not amount to criminal breach of trust. PLD 1951 Lah. 342 Abdul Karim v. Crown.
Goods purchased with own money as licensees of the Government Civil Supplies Department for distribution to permit holders according to directions of the Civil Supplies Department. Held, accused trustees of goods and not owners. Accused found short of goods committed the offence under Section 406, PPC (DB) PLD 1952 Dac. 141 Tufail Ahmad Khan v. Crown.
Attached property not produced: Property attached by Civil Court was entrusted to the accused. He deliberately refused to produce it in the court, held the accused was guilty of criminal breach of trust. 36 Cr.LJ 119 Chanan Singh v. Emp. AIR 1935 Lah. 31; PLD 1959 Lah. 270. Muhammad Rafiq.
Harvesting crops under attachment: When the Judgment-debtor harvests his own crops under attachment he is guilty of offence under section 403 P.P.C. (1898) 22 Mad. 151 Obbayya v. Emp.
Misappropriating house of deceased is not an offence as the property contemplated under Section 404 is movable property. (1895) 23 Cal. 372 Jugdown Sinha.
Taking away rafters from the house of the deceased is an offence under Section 404, P.P.C. 27 Cr.LJ 17 = AIR 1925 A-673 Daud Khan.
Criminal breach of trust by company, the directors or its officers responsible for the offence can be proceeded against. Order quashing proceedings by High Court set aside. (SC) NLR 1981 Cr. 187 PIA Corp v. Mir Khalid Waheed etc.
Firm manager whether liable: A manager of a firm cannot be held criminally liable for any breach of trust if the entrustment of goods was made to the firm and not to the Manager personally. PLD 1951 Lah. 342 Abdul Karim v. Crown.
Partner: High Court held that partner cannot be prosecuted for disposal of partnership property, yet if partner engaged to look after property disposes of that property and appropriates proceeds he is guilty of Criminal breach of trust. Supreme Court granted leave to appeal to see whether partner was engaged to look after the property. (SC) 1968 SCMR 470 Julian H Dinshaw v. Ahmad Ali 1968 P.Cr.LJ 890.
" is liable to be tried for criminal misappropriation of partnership property 43 Cr.LJ 395 = AIR 1942 Mad. 182 Baron Von Dincklage.
Working partner selling away firm property. Subsequently denying having received any property. Working partner not servant of the firm. Held no offence under Section 408 committed. (DB) PLD 1951 Dac. 56 Abdul Ghafur v. Crown.
Partnership property: If a partner is entrusted with partnership property and he dishonestly misappropriates it or converts it to his own use, he commits the offence. 1903 PR No. 10 of 1903 = 1 Cr.LJ 506 Karim Bakhsh v. Habib Ullah. AIR 1939 Lah. 406 = 40 Cr.LJ 942 Sham Lal v. Chaman Lal.
Pledgee is guilty of this offence if he denies the pledge. AIR 1936 Cal. 673 = 38 Cr.LJ 118 Abinas Chandar Kumar v. Dhani Bakhsh.
Arbitration Clause: Arbitration Clause in an agreement between principal and agent does not mean that no criminal liability under Section 409, P.P.C. can arise under the agreement. (DB) PLD 1960 Lah. 1060 Sutlej Cotton Mills, Okara v. S.M. Illahi.
Refusal to render accounts: Mere refusal to give accounts or pay the money is not enough. Misappropriation with dishonest intention is necessary for conviction. (DB) PLD 1960 Lah. 1060 Sutlej Cotton Mills, Okara.
Sale proceeds: The word property includes sale-proceeds of goods entrusted to the accused. 30 Cr.LJ 329 Dwarkadas Haridas v. Emp. AIR 1928 Bom. 521.
Value of property is immaterial except so far as Section 95 of the Penal Code is concerned. A cancelled cheque falls within the term property. 27 All. 28 Maula Bakhsh. v. Emp.
Movable property: Criminal breach of trust can be committed only of movable property and not of immovable property. 27 Cr.LJ 760 Chandan Lal v. Emp AIR 1926 Lah. 478.
Bona fide claim: If the accused in tendering the account admits the appropriation, alleging a right in himself, no matter how unfounded or setting up an excuse, no matter how frivolous. Offence is not committed. 1842 Carrington and Marshman 501 Normal v. Queen AIR 1920 Pat. 663 Panchi Mandt v. Emp. 21 Cr.LJ 609.
Servant misappropriating money received for his master commits the offence under Section 403, P.P.C. 6 Luck. 435 Shiam Sundar.
Lambardar collecting land Revenue but not depositing in government treasury commits offence under section 409, PPC (DB) PLD 1953 Lah. 449 Crown v. Imdad Khan.
Fraudulent misappropriation is not covered by Section 409, P.P.C. PLD 1956 Kar. 489 FS Wahid-ud-Din v. Crown.
Section 409, P.P.C. not repealed by Section 5(1)(c) of Act II of 1947. Section 26 of the General Clauses Act (X of 1897) operates to obviate altogether any implied repeal of one penal law by another. PLD 1952 Lah. 648 Abdul Latif v. Crown. 1970 Kar. 899. PLD 1957 SC (Ind.) 513. Om Parkash.
Carrier of goods not delivering goods in safe and sound condition, may be proceeded for damages for lack of care but not under Section 405/407, P.P.C. PLJ 1975 Cr.C. (Lah.) 228 C.C.M.P.W.R. v. Ranco.
Civil and Criminal liability: Complaint disclosing prima facie offence. Mere fact of Civil remedy also being open does not oust jurisdiction of Criminal Courts. 1975 P.Cr.LJ 545 = P.L.J. 1975 Cr.C. (Kar.) 543 Azhar Latif v. Esoof Hashmi.
Relief goods not distributed to flood victims. False distribution papers made. Held, offence under section 409, P.P.C. committed. (SC) 1970 SCMR 869 AFM Abdul Haye. Money not given to person entitled. 1970 SCMR 808 Shamus-Din.
Property kept in accused's house, with his permission, by itself did not constitute "entrustment" as contemplated by Section 406, P.P.C. PLD 1951 Dac. 44 Jogender Kishor v. Crown.
Sentence: fine and imprisonment: Though it is permissible under Section 408, P.P.C. to impose fine alongwith imprisonment, ordinarily the double sentence should not be inflicted unless necessary in the interest of justice. (DB) PLD 1952 Dac. 266 Kismat Ali v. Abdul Kader.
Six items of Criminal Breach of Trust cited jointly in one charge for offence u/S. 409 PPC, held the charge was sustainable u/S. 222(2) Cr.P.C. and also because the accused had not been prejudiced in his defence nor he had raised any such objection at the trial. 1992 SCMR 1583, Shah Nawaz.