Criminal Breach of Trust
In Pakistan, Criminal Breach of trust is a criminal offense and is covered in the Pakistan Penal Code from section 405 to section 409. Criminal Breach of Trust is an offense that occurs when someone who you trust with your property misuses it. Misuse can be further defined as selling it, stealing it, damaging it, or keeping it for themselves.
Who the person is entrusted and how they misuse the property given are factors that prevail in the conviction and sentencing of the offender/s. In this article, we are going to explore how the law of Criminal Breach of Trust works in Pakistan.
To establish a charge of criminal breach of trust the prosecution must prove not only entrustment but also that the accused dishonestly misappropriated the property
1980 SCMR 402
What is a Criminal Breach of Trust?
These cases are often the question of personal and business transactions. When a party (the giver) gives another party (The receiver) an item (this can be cash, a commodity, or a legal instrument i.e a cheque, contract, a power of attorney, etc.) with a specific instruction, the receiver is then entrusted with the item.
When the receiver then doesn’t do what the giver asked them to do, that is where a breach of trust begins. How the receiver acts with the items will dictate whether it’s a Criminal Breach of trust or not. The punishment for Criminal Breach of trust by an individual, company (depending on circumstances), clerk, servant, or carrier is up to 7 years imprisonment, a fine, or both.
For attracting offence defined as “criminal breach of trust” under s 405 ppc., there must be an ‘entrustment’ of property and thereafter that property should have been alienated, disposed of, misappropriated or converted in the manner specified in the provision
PCrLJ 2015 Islamabad 576
Crimes that come with Criminal Breach of Trust
More often than not, other crimes are attached with Criminal Breach of trust. If the receiving individual claims to be someone they are not (just to get the items) this would also attract criminal charges of cheating, fraud, and impersonation. If they made fake documents to further deceive the owner of the items to hand them over, this would also attract forgery.
If the person or individuals who committed this crime are bankers, merchants, agents, or public servants (i.e. they work for the government or in a federal office) then they would be charged under section 409. Here, they would receive a punishment of up to 10 years imprisonment, a fine, or both.
The items that are considered in Criminal Breach of Trust
Firstly, the items and the transaction must be legal. For example, in cases dealing with contraband and narcotics, a criminal breach of trust wouldn’t be a viable remedy.
Secondly, the items that were given by the giver to the receiver need to go against the reasons for the exchange of goods; For example, if you store your goods at a warehouse, and pay for their safekeeping for a period of time. After that period of time, if you find that your items are severely damaged, the storekeeper can be charged with a Criminal Breach of trust.
Prosecution not duty bound to prove that the money received by the accused was actually converted to his own use
PLD 1999 SC 309
The ingredients for Criminal Breach of Trust
In essence, there are 5 key ingredients to constitute a criminal breach of trust in Pakistan, which are:-
- Dishonest Misappropriation OR conversion to his own use by the person in whom the confidence is reposed
- Dishonest use or disposal of the property in violation of any direction of law
- Dishonest use or disposal of property in violation of any legal contract
- That the intention of the crime (mens reas) goes hand in hand with the action of the crime (actus reas) of misusing the item.
Entrustment, dishonest misappropriation or conversion to one’s own use or dishonest disposal of property by the offender, are the essential ingredients to constitute an offence under section 409 PPC
2009 SCMR 517
In matters of Breach of Contract
The offense, known locally as dafa 405 and dafa 406, can be used in commercial contracts; specifically when it is breached. The conditions of the breach would be the factors that would determine whether the breach of contract would end in a criminal matter or not. Let’s go back to our example of the goods in the warehouse.
Let’s assume that we did not pay the warehouse for the safekeeping of our goods, but instead, we paid rent. During the period of our goods being stored in the warehouse, a water-pipe bursts which destroy everything in the warehouse. The question now is, would the warehouse owner be liable for a Criminal Breach of Trust? The answer is no because there was no dishonesty, the damage was sustained due to a tragedy.
A company can be criminally lialbe [to criminal breach of trust]
1981 SCMR 573
In matters of Power of Attorneys
When an individual wants another person to handle their affairs, they would simply have a Power of attorney issued to that individual. That individual is now entrusted to act on behalf of the person to handle his or her affairs.
If the entrusted person then decides to misuse his or her authority, this could then become a crime under Criminal Breach of trust. Let’s suppose that one individual in the UK sends a Power of Attorney to a relative in Pakistan to sell his house to a specific customer. If the relative in Pakistan sells the house to someone else (against the agreement) or even worst, gifts himself the house for free, this would be considered a criminal Breach of Trust.
Civil and Criminal liabilities, no doubt, can be agitated and obtained simultaneously, but in a family matter the same cannot be allowed and approved
2000 PcrLJ 1100
In matters of Cheque Fraud
Quite commonly in Pakistan, cheques are used as a part of day-to-day life both in personal and corporate matters. By giving a Cheque to someone, they can (in some cases) receive goods before the cheque is presented to the bank to be cashed out.
If someone gives a bogus cheque on purpose to get the goods, knowing that it won’t cash out, this is also a matter of Criminal Breach of Trust. In some cases, this can also be classed as cheating and fraud, as well as theft.
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