Adetailed Overview, understanding about the section 405 & 406 of the Pakistan Penal Code:
Sections 405 and 406 of the Pakistan Penal Code (PPC) address criminal breach of trust and the penalties associated with such offenses. Below is a detailed explanation of these provisions, along with references to landmark judgments interpreting them:
Section 405: Criminal Breach of Trust
Definition:
Section 405 defines "criminal breach of trust" as an act where a
person, who is entrusted with property or dominion over it, dishonestly
misappropriates or converts it for their own use, or uses it in violation of
any direction of law or any legal contract regarding the mode of its discharge.
Key
Elements:
- Entrustment: The accused must have been entrusted with property or
had control over it.
- Dishonest Misappropriation or
Use: The accused dishonestly
misappropriates or converts the property for personal use.
- Violation of Contract or Legal
Directions: There must be a breach of a
specific legal or contractual obligation regarding the property.
Section 406: Punishment for Criminal Breach of Trust
Penalty:
Section 406 prescribes punishment for criminal breach of trust, which may
extend to:
- Imprisonment: Up to 3 years, or
- Fine: An amount decided by the court, or
- Both.
Landmark Judgments and Legal Interpretations
1. Muhammad Sadiq v. State (2007 SCMR 784)
The
Supreme Court of Pakistan clarified the elements of "entrustment" and
"dishonest intent" in this case. The court held that mere failure to
return property does not constitute criminal breach of trust unless the
prosecution proves dishonest intention.
2. Syed Mansoor Ali Shah v. State (PLD 2004 Lahore 204)
This
case emphasized the importance of proving entrustment and the accused's control
over the property. The court observed that a breach of civil obligations (e.g.,
failure to repay a loan) does not automatically convert into a criminal offense
unless fraudulent intent is established.
3. The State v. Amanullah Khan (PLD 1998 Karachi 122)
In
this case, the court underscored the distinction between civil liability and
criminal breach of trust. It held that the prosecution must demonstrate beyond
reasonable doubt that the accused acted dishonestly and violated a legal or
contractual trust.
4. Ghulam Muhammad v. State (1983 SCMR 1056)
The
court ruled that the entrustment of property must be proved through reliable
evidence, and any ambiguity in the contract or agreement will be construed in
favor of the accused.
Distinction Between Criminal and Civil Breach of Trust
One
of the critical issues courts have dealt with is distinguishing between
criminal breach of trust under Section 405 and a breach of civil trust.
Pakistani courts have consistently held that:
- Criminal Intent: To invoke Section 405/406, the prosecution must prove
dishonest intent beyond a reasonable doubt.
- Civil Disputes: Simple breach of contract or failure to fulfill a
financial obligation is a civil matter unless it is shown that the accused
acted dishonestly from the outset.
Sections
405 and 406 of the PPC play a vital role in addressing trust-related crimes.
The courts in Pakistan have set a high threshold for proving criminal breach of
trust to prevent its misuse in civil disputes. Entrustment and dishonest intent
remain the two pillars of these offenses, and the burden of proof lies heavily
on the prosecution.
That term the “Criminal
Breach of Trust” was defined in a celebrated judgment by the honorable
Lahore High Court reported as 2019 Pcr. LJ 1622 & it was held
as followed;
“An offence of criminal breach of trust defined by section 405,
P.P.C. is constituted and the same is punishable under section 406, P.P.C. if
some property is given on trust & the same property is to be returned”.
That in its another
judgment reported as 2019 MLD 346 the honorable Lahore high court
held that;
“Mere
mentioning the word “Amanat” (Trust), in the contents of the FIR would not
attract the provisions of S. 405, P.P.C., Punishable under S. 406, P.P.C., when
otherwise ingredients of the said offence were not attracted from the contents
of the FIR”.
PLJ 2020 Cr.C. (Note) 21
[Lahore High Court, Multan Bench]
Present: Ch. Mushtaq Ahmad, J.
SHAUKAT ALI--Petitioner
versus
STATE and another--Respondents
Crl. Misc. No. 6325-B of 2017, decided on 3.11.2017.
Criminal Procedure Code, 1898 (V of 1898)--
----S. 498--Pakistan Penal Code, (XLV of 1860), S. 406--Pre-arrest
bail, confirmed--Allegation of--Misappropriate the amount--Allegation against
petitioner according to FIR is that he misappropriated an amount of Rs.
2,10,000/-which was given to him by complainant as trust--Matter was reported
to police after about 1½ year of the alleged occurrence--According to police
investigation, matter was criminal breach of trust--In such backdrop, case
against petitioner calls for further inquiry--Petitioner has already joined investigation--Sending him behind the bars at this stage would
serve no useful purpose--Petition was allowed. [Para 3] A
Rana Jahan Zaib Khan, Advocate with
Petitioner.
Mr. Hassan Mahmood Khan Tareen, Deputy Prosecutor
General for State.
Complainant in Person.
Date of hearing: 3.11.2017.
Order
This petition has been moved by Shaukat Ali accused in case FIR No. 350/2017 dated 23.09.2017 under
Section 406, PPC registered at Police Station Kacha Khooh, District Khanewal seeking pre-arrest
bail.
2. Arguments heard and record perused.
3. Allegation against petitioner according to FIR is that he
misappropriated an amount of Rs. 2,10,000/-which was given to him
by complainant as trust. Matter was reported to police after about 1½ year of the alleged occurrence. According to police
investigation, matter was not of criminal breach of trust. In such backdrop, case
against petitioner calls for further inquiry. Petitioner
has already joined investigation. Sending him behind the bars at this stage
would serve no useful purpose. Therefore, petition in hand is allowed and
ad-interim pre-arrest bail already granted to the petitioner by this Court is
confirmed, subject to his furnishing bail bonds in the sum of Rs. 1,00,000/-
with one surety in the like amount to the satisfaction trial of Court.
(A.A.K.) Bail
Confirmed
PLJ 2020 Cr.C. (Note) 25
[Lahore High Court, Bahawalpur Bench]
Present: Tariq Iftikhar Ahmad, J.
AZHAR FAROOQ--Petitioner
versus
STATE, etc.--Respondents
Crl. M. No. 3218-B of 2017, decided on 7.12.2017.
Criminal Procedure Code, 1898 (V of 1898)--
----S. 498--Pakistan Penal Code, (XLV of 1860), S.
406--Anticipatory bail, confirmed--Allegation of--Misappropriated sugar--FIR in
this matter has been got recorded after a delay of 21 months--Though an attempt
has been made by the complainant to explain the delay but not a single word has
been stated in this regard rather that facts have been stated in routine which
prima facie is not sufficient to explain the delay--Such a delay in lodging the
FIR caused serious doubt about the veracity of prosecution version--Offence in
which the petitioner is charged does not attract the prohibitory provision of
Section 497 of the Criminal Procedure Code, 1898--Application for anticipatory
bail is allowed and order granting ad-interim anticipatory bail is
confirmed. [Para 6 & 7] A
Mr. Zafar Iqbal Awan, Advocate alongwith Petitioner.
Mr. Sultan Qadir, Advocate for Complainant.
Mr. Najeeb Ullah Jatoi, Deputy Prosecutor General for Respondent.
Date of hearing: 7.12.2017.
Order
The petitioner seeks anticipatory bail in case FIR No. 298 of
2017, registered under Section 406 of the Pakistan Penal Code, 1860, at Police
Station City Chishtian, District Bahawalnagar.
2. According to FIR the accusation contained against the
petitioner is that he misappropriated 2010 sacks of sugar which the complainant
had kept into his godown.
3. The learned counsel for the petitioner contends that the
petitioner is innocent; he has been falsely roped in this case by the
complainant with mala fide intentions and ulterior motives;
there is a delay of more than 21 months in registration of FIR and as such the
same is sufficient to indicate that the FIR has been got lodged after due deliberations
and consultations. Argues that there is business dispute between the parties
and the story narrated in the FIR is fabricated. Lastly contends that the
offence, in which the petitioner is involved, does not fall within prohibitory
clause of Section 497 of The Criminal Procedure Code, 1898.
4. On the other hand learned Deputy Prosecutor General assisted by
learned counsel for the complainant, after going through the record, has
vehemently opposed this bail petition on the grounds that the petitioner is
named in the FIR with specific role. Further contends that bail before arrest
is an extraordinary relief meant for innocent persons but the petitioner is
fully involved in this case; during investigation he has been found connected
by the investigating officer with the commission of offence alleged against
him.
5. I have heard the learned counsel for the petitioner, the
learned Deputy Prosecutor General and the learned counsel for the complainant
and have also gone through the record of this case.
6. It has been noticed that the FIR in this matter has been got
recorded after a delay of 21 months. Though an attempt has been made by the
complainant to explain the delay but not a single word has been stated in this
regard rather that facts have been stated in routine which prima facie is not
sufficient to explain the delay. Such a delay in lodging the FIR caused serious
doubt about the veracity of prosecution version. The offence in which the
petitioner is charged does not attract the prohibitory provision of Section 497
of the Criminal Procedure Code, 1898.
7. Pursuant to above, application for anticipatory bail is hereby
allowed and the order granting ad-interim anticipatory bail to the petitioner
is confirmed subject to his furnishing fresh bail bonds in the sum of Rs.
200,000/- (Rupees two hundred thousand) with one surety in the like amount to
the satisfaction of learned trial Court.
8. It is, however, made clear that the observation in this order
is tentative in nature and would not effect the case of either
party at the trial.
(A.A.K.) Bail
confirmed..
PLJ 2020 Cr.C. (Lahore) 369
Present: Farooq Haider, J.
ASIM AHMAD--Petitioner
versus
STATE, and another--Respondents
Crl. Misc. No. 64651-B of 2019, decided on 23.12.2019.
Criminal Procedure Code, 1898 (V of 1898)--
----Ss. 497(2) & 498--Pakistan Penal Code, (XLV of 1860), S.
406--Pre-arrest bail, grant of--Further inquiry--It is own case of the
prosecution that accused was doing business of property and four years prior to
the registration of instant case he asked the complainant for paying
Rs.30,00,000/- (thirty lacs) because he is making a
deal of property and resultantly complainant paid him said amount which has not
been paid back by accused/petitioner; therefore, it is crystal clear that aforementioned
amount was given by complainant and taken by petitioner/accused as loan with
promise to pay back the same when his deal of property will be cleared; which
is purely a civil dispute regarding non-payment of amount which was taken as
loan and prima facie any offence punishable under Section 406, PPC is not made
out because basic ingredient of Section 405, PPC punishable under Section 406,
PPC is missing--Therefore, case of the petitioner falls in the ambit of further
inquiry i.e. Section 497 (2), Cr.P.C.--Bail confirmed.
[Pp.
370 & 371] A & B
2015 SCMR 1575 ref.
Mr. Abdul Samad Khan Basria, Advocate along
with Petitioner.
Ch. Hasham Hayat Wathra, Advocate for Complainant.
Rai Akhtar Hussain, Deputy Prosecutor
General for State.
Date of hearing: 23.12.2019.
Order
Through this petition, Asim Ahmad petitioner
has sought pre-arrest bail in case arising out of F.I.R. No. 1526 of 2019 dated
10.08.2019 registered under Section 406, PPC at Police Station North Cantt., District Lahore.
“In case of entrustment, the money/property received is to be
retained for return to the giver at a later lime as opposed to a promise or
contract where investment is made or money is paid for the purposes of fulfilment of a specific agreed upon purpose/contract. In such a case
where money/property has been entrusted to a person, using such amount/property
for any other purpose would not attract the penal consequences of Section 405,
PPC ibid. For the purposes of above view, we draw support from the judgment of
this Court reported as Shahid Imran v. The State and another (2011 SCMR 1614), wherein it
has been held “The law clearly recognizes a distinction between
payment/investment of money and entrustment of money or property as in the former
case the amount of money paid or invested is to be utilized for some purpose
whereas in the latter case that sum of money or property is to be retained and
preserved for its return to the given and the same is never meant to be utilized for any other purpose……. a mere breach of
a promise, agreement or contract does not ipso facto attract the definition of
criminal breach of trust contained in Section 405, P.P.C. and such a breach is
nor synonymous with criminal breach of trust without there being a clear case
of entrustment.”
Therefore, case of the petitioner falls in the ambit of further
inquiry i.e. Section 497 (2), Cr.P.C. It goes without saying that instant FIR was registered on
10.08.2019 after filing of suit by present petitioner for restitution of
conjugal rights on 29.06.2019 against Safia Asim i.e. his 1st wife, who is sister
of complainant and suit for recovery of golden ornaments and money on
23.07.2019 against his aforementioned first wife and Rafaqat Ali (present complainant), etc. Furthermore when
aforementioned civil transaction has been converted into registration of a
criminal case by the complainant after joining hands with the police after
delay of about four years then prima facie, mala fide intention
on part of prosecution cannot be out rightly ruled out.
3. In view of what has been discussed above, application filed by
the petitioner for grant of pre-arrest bail, is allowed, ad-interim
pre-arrest bail already granted to him by this Court vide order
dated 29.10.2019 is hereby confirmed subject to his furnishing fresh bail bonds
in the sum of Rs.200,000/- (Rupees two hundred thousand only) with two sureties in the
like amount to the satisfaction of the learned trial Court within a period of
fifteen days from today.
4. It is, however, clarified that observations made herein are
just tentative in nature and strictly confined to the disposal of this bail
petition.
(A.A.K.) Bail
confirmed
2015 SCMR 1575 titled as Rafiq Haji Usman v.
Chairman, NAB and another it was held that:-
Equalant citation: PLJ 2020 SC (Cr.C.) 94
"an essential element for making out and
establishing a case of criminal breach of trust is the entrustment of property
or money or with any dominion over property, which is dishonestly
misappropriated or dishonestly used or disposed in violation of any direction
prescribed by law or the mode in which such trust was to be discharged or in
the context any contract etc., however the promise to sell the property for
which consideration/money is paid or an agreement to sell is entered upon and
the money has been paid pursuant to such an agreement, it shall not the same as
entrustment of property within the concept of noted provision. In case of
entrustment, the money/property received is to be retained for return to the
giver at a later time as opposed to a promise or contract where investment is
made or money is paid for the purposes of fulfillment of a specific agreed upon
purpose/contract. In such a case where money/property has been entrusted to a
person, using such amount/property for any other purpose would not attract the
penal consequences of section 405 ibid”.
Shahid Imran v. The State and another (2011
SCMR 1614),
Wherein it has been held that;
"The law clearly recognizes a distinction
between payment/investment of money and entrustment of money or property as in
the former case the amount of money paid or invested is to be utilized for some
purpose whereas in the latter case that sum of money or property is to be
retained and preserved for its return to the giver and the same is never meant
to be utilized for any other purpose...a mere breach of a promise, agreement or
contract does not ipso facto attract the definition of criminal breach of trust
contained in section 405, P.P.C. and such a breach is nor synonymous with
criminal breach of trust without there being a clear case of entrustment".
Crl.A No.154-L/2013
IN THE SUPREME
COURT OF PAKISTAN
(Appellate
Jurisdiction)
PRESENT:
Mr. Justice
Manzoor Ahmad Malik
Mr. Justice
Sardar Tariq Masood
Mr. Justice Syed
Mansoor Ali Shah
Criminal Appeal
No.154-L of 2013, and
Criminal Petition
No.366-L of 2013.
(on appeal from
the judgment of Lahore High Court,
Lahore dated 26.02.2013, passed in Crl.A
No.1053/2007)
Ali Ahmad (in
Crl.A-154-L/13) …Appellant
Imtiaz Ahmad (in
Crl.P-366-L/13) …Petitioner
Versus
The State &
another (in Crl.A-154-L/13)
Ali Ahmad, etc
(in Crl.P-366-L/13)
…Respondents
8- In a
criminal trial, it is now jurisprudentially well entrenched, the proper course
for the court is to first discuss and assess the prosecution evidence,
particularly the reliability of the eye-witnesses, in order to arrive at the
conclusion as to whether or not the prosecution has succeeded in proving the
charge against the accused on the basis of its evidence.1 Burden is
always on the prosecution to prove its case and it is only when a prima facie
case is made out against the accused sufficient to justify his conviction.
1-See Ashiq
Hussain v. State, PLD 1994 SC 879.
PLJ 2008 Cr.C. (Lahore) 289.
Accused received amount as earnest
money which was treated to be as trust and entered into an agreement to sell.
No condition in agreement to sell that earnest amount would be treated trust
amount. Non-compliance of agreement to sell does not constitute any offence.
Suit for specific performance was pending in Court of competent jurisdiction.
In the present case prima facie no offence is made out against the
accused. Direction to take disciplinary action against
SHO, who had registered the case in spite of fact that it was dispute of civil
nature between the parties which was already pending before the Court of
competent jurisdiction for performance of agreement to sell. If the
case was registered it should have been cancelled on the very first date, when
the agreement to sell was brought on the record, which does not find mention
that the amount was to be treated as earnest money.
PLJ 2015 SC 1075
405.
Criminal breach of trust.--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 willfully suffers any
other person so to do, commits “criminal breach of trust”.
7.
In view of the above facts and circumstances of the case, as it is a settled
law that bail cannot be withheld as a matter of punishment, as has been even
held by the High Court, we find that the present case being of civil nature and
requiring further inquiry, the case not falling strictly within the purview of
the noted provisions, the petitioner is entitled to bail, therefore, this
petition is converted into an appeal and allowed in terms of our short order.
-The End-
Writer:
Mian Asif Mehmood
Advocate High Courts of Pakistan
MSC. LLM
Islamabad
07/12/2024
