The section that replaced IPC 405 to 409 on 1 July 2024 — with the general punishment raised from three years to five. What "entrustment" means and why an unpaid debt is not this offence, the five sub-sections and how differently they behave, stridhan, unpaid provident fund, and how a complaint is filed in Delhi.
Section 316 of the Bharatiya Nyaya Sanhita, 2023 punishes criminal breach of trust — property lawfully entrusted to a person, and then dishonestly misappropriated or used in violation of the terms on which it was given. Sub-section (1) defines it. Sub-section (2) is the general offence at five years. Sub-sections (3) and (4) — a carrier, wharfinger or warehouse-keeper, and a clerk or servant — carry seven years. Sub-section (5) — a public servant, banker, merchant, factor, broker, attorney or agent — carries life, or up to ten years.
The general punishment went up from three years to five. A number of widely-read pages still give the old figure, and at least one says the BNS kept the same structure. It did not.
Every sub-section is cognizable and non-bailable, so an FIR can be registered — a significant difference from cheating, where only Section 318(4) is cognizable. And no limitation applies to any sub-section, because the limitation rules stop at offences punishable with three years.
The dividing line is entrustment. If the property was handed over under a sale or a loan, the relationship is debtor-creditor and non-payment is a civil matter — the Supreme Court has called prosecutions of that kind "flawed to the core". If it was handed over to be held, applied or accounted for, that is entrustment, and misusing it is this offence.
Five sections of the Indian Penal Code became one section with five sub-sections. No category was added, none was removed, and the definition is unchanged. One punishment moved — and it is the one that applies to most cases.
| Who | Old law | New law | Punishment then | Punishment now |
|---|---|---|---|---|
| Definition, with the Explanations and illustrations | Section 405 IPC | 316(1) BNS | Definitional | |
| Anyone — the general offence | Section 406 IPC | 316(2) BNS | 3 years | 5 years |
| Carrier, wharfinger or warehouse-keeper | Section 407 IPC | 316(3) BNS | 7 years | 7 years |
| Clerk or servant | Section 408 IPC | 316(4) BNS | 7 years | 7 years |
| Public servant, banker, merchant, factor, broker, attorney or agent | Section 409 IPC | 316(5) BNS | Life or 10 years | Life or 10 years |
The offence is the same in each; what changes is who the accused was, and therefore how seriously the law treats the breach. The reasoning is that the greater the trust reposed, the greater the wrong in betraying it.
| Sub-section | Applies to | Punishment | Typical case |
|---|---|---|---|
| 316(2) | Any person | Up to 5 years, or fine, or both | Money given for a specific purpose and used elsewhere; stridhan retained; a friend entrusted with goods |
| 316(3) | A carrier, wharfinger or warehouse-keeper | Up to 7 years and fine | Consignment handed to a transporter that never reaches the consignee |
| 316(4) | A clerk or servant, or a person employed as one | Up to 7 years and fine | An employee misappropriating cash, stock or collections |
| 316(5) | A public servant, banker, merchant, factor, broker, attorney or agent, in the way of his business | Life, or up to 10 years, and fine | An attorney or agent retaining sale proceeds; a public servant misapplying funds |
| Replaces | Sections 405 to 409 of the Indian Penal Code, 1860 |
| In force from | 1 July 2024 |
| Cognizable? | Yes — every sub-section. An FIR can be registered |
| Bailable? | Non-bailable — every sub-section |
| Tried by | Magistrate of the first class, including 316(5) |
| Limitation | None for any sub-section — the limitation rules stop at three years |
| 316(2) — general | 5 years · compoundable by the owner, with court permission |
| 316(3) — carrier, warehouse-keeper | 7 years · compoundable by the owner, without court permission |
| 316(4) — clerk or servant | 7 years · compoundable by the owner, with court permission |
| 316(5) — public servant, banker, agent | Life or 10 years · not compoundable |
| Who may compound | The owner of the property — not the police, and not a third party |
Two things in that table run against intuition and are worth stating plainly, because no other page appears to.
The seven-year offence is easier to compound than the five-year one. Section 316(3), the carrier and warehouse-keeper limb, may be compounded without the court's permission, while Section 316(2) needs it. That is how the tables are drawn.
Nothing here is time-barred. Because every sub-section exceeds three years, the limitation provision does not bite at all. This matters enormously in two situations that come to us constantly: a woman told her stridhan claim is too old, and an ex-employee told an old misappropriation cannot now be raised. Delay is an argument about credibility; it is not a bar.
The first and third do the work. If there was no entrustment, the section does not apply however badly the person behaved. If there was no dishonesty, it does not apply however large the loss.
The Supreme Court explained that the word "entrusted" "carries the implication that the person handing over property continues to be its owner", and that the owner "must have confidence in the person taking the property so as to create a fiduciary relationship."
It added that the property "must necessarily be the property of some person other than the accused."
So the test is not whether money changed hands. It is what the handing over was for.
| This is entrustment | This is not |
|---|---|
| Money given to be applied to a stated purpose, with the giver remaining the owner until it is so applied | Money lent, to be repaid with or without interest — a debt |
| Goods given to be held, carried, stored or sold on the owner's behalf | Goods sold, where only the price remains unpaid |
| Jewellery handed to the husband or his family to keep for the wife | A refundable security deposit paid as consideration under a contract |
| Collections received by an employee or agent on the employer's or principal's behalf | An advance paid under a contract that the other side then fails to perform |
The courts have drawn the line in exactly this way. A deposit placed with a bank to earn interest has been held not to be an entrustment, because the relationship it creates is debtor-creditor; a deposit placed for a specific purpose, with the depositor retaining control, is a different thing. And in a decision of 2026 the Supreme Court held that a refundable security deposit paid as consideration cannot be treated as an entrustment of property.
This deserves its own heading because it is the most common misconceived complaint under the section.
"prosecution of cases on charge of criminal breach of trust, for failure to pay the consideration amount in case of sale of goods is flawed to the core."
"There can be civil remedy for the non-payment of the consideration amount, but no criminal case will be maintainable for it."
The Court has stayed with that position under the new law. In a decision of August 2026 it held that mere retention of money due under a contract does not constitute criminal breach of trust without proof of a dishonest intention in the disposal or retention of the property. And in May 2026 it held that the mere allegation of non-payment of a remaining amount due cannot, by itself, give rise to this offence.
It has also drawn the line between dishonesty and incompetence. In the context of the agent and banker limb the Supreme Court has said that a mere error of judgment does not attract the provision.
Complaints routinely charge criminal breach of trust and cheating together on one transaction. The Supreme Court has held that this cannot be right.
The reasoning turns on when the wrongdoing occurred. Cheating requires a dishonest intention at the very inception — the property was obtained by deception, and so was never lawfully entrusted. Criminal breach of trust presupposes a lawful entrustment, with the dishonesty coming afterwards. One says the handover was tainted from the start; the other says it was clean and the misuse came later. Both cannot be true of the same handover, and the Court described the two offences as antithetical to each other.
Here is an argument that appears on no other page about this section and that decides a great many commercial FIRs.
When a dispute involves a company, the FIR is very often drawn to name the company and then every director and office bearer on the letterhead, without saying what any of them personally did. In Delhi Race Club the Supreme Court addressed that directly.
The Court noted that the penal law "does not contain any provision for attaching vicarious liability on the part of" office bearers of a company.
It held that office bearers "could be arrayed as accused only if direct allegations are levelled against them", and that vicarious liability "would arise provided any provision exists in that behalf in the statute."
Some statutes do create such liability expressly — the cheque-dishonour provisions of the Negotiable Instruments Act are the familiar example. The BNS does not. So a director named in a breach of trust FIR with no act attributed to him personally has a clean, structural argument, and it does not depend on disputing a single fact.
The section contains Explanations, carried forward from the old law, that convert a familiar employment grievance into a criminal offence.
Where an employer deducts the employee's contribution to a provident fund or family pension fund from the employee's wages, that amount is deemed to have been entrusted to the employer. If he then defaults in paying it into the fund, he is deemed to have dishonestly used it. A corresponding Explanation applies to the Employees' State Insurance Fund.
Two limits are worth being precise about. The deeming provisions cover the amount deducted from the employee's wages — the employee's own share — not the employer's separate contribution. And they are deeming provisions, so what would otherwise require proof of entrustment and dishonesty is supplied by the statute itself.
There is also a separate offence under the Employees' Provident Funds and Miscellaneous Provisions Act for failure to pay over the employee's contribution that has been deducted, which carries a mandatory minimum sentence. An employee in this situation therefore has two criminal routes as well as the recovery machinery of the fund itself, and should ask about all three.
For our readers this is the most important application of the section, and it sits alongside our page on Section 85, with which it is very often filed.
Stridhan is the property a woman receives — before, at and after marriage, from her own family and from her husband's — and it is hers absolutely.
"It is her absolute property with all rights to dispose at her own pleasure."
"The husband has no control over her stridhan property."
"He may use it during the time of his distress but nonetheless he has a moral obligation to restore the same or its value to his wife."
Where the jewellery and gifts were handed over to the husband or his family — which is what customarily happens at and after a wedding — the courts have treated that as an entrustment for the purposes of this section. The Supreme Court held, in a decision on the old Section 406, that no special agreement is necessary: the entrustment arises from the circumstances in which the property came into the husband's possession.
Women are frequently told that a stridhan complaint is too old. Two things answer that.
A criminal case does not, by itself, get the jewellery back. Two civil routes do the actual work, and they run alongside:
A partner who takes partnership money is not usually guilty of this offence, and the reason is worth understanding rather than resenting.
Every partner has dominion over partnership property by virtue of being a partner. The property is not "someone else's" in the way the section requires, and the partners' mutual rights are worked out in an action for accounts. The Supreme Court held long ago that a partner can be criminally liable only where dominion over the assets was, by a special agreement between the parties, entrusted to him — in which case the entrustment is established by that agreement rather than by the partnership itself.
So the question in a partnership dispute is always: was there an agreement placing this money or this asset in this partner's hands on specified terms? If yes, the section can apply. If the complaint is that a partner has taken more than his share, the remedy is a suit for dissolution and accounts.
Section 316(5) names the agent, the attorney, the broker, the factor, the merchant, the banker and the public servant, and it carries life or up to ten years. The reason the sentence is so much higher is that each of these people receives property precisely because of the office they hold.
The classic case in Delhi is the power-of-attorney holder who sells a property and retains the proceeds. The money was received on the principal's behalf; there is no question of it being the attorney's own; and the entrustment is written into the instrument itself. Similar cases arise with brokers holding earnest money, with agents collecting on behalf of a principal, and with professionals holding client funds.
Because 316(5) is not compoundable, a settlement in such a matter cannot be closed before the trial court. Where the money has been repaid and both sides want the case to end, the route is a quashing petition to the High Court — see our page on Section 528 BNSS.
Section 316(4) covers a clerk or servant, or a person employed as one, and carries seven years. It is the provision under which employers file when cash, stock or collections go missing.
Two cautions, one for each side. For an employer: the offence requires entrustment and dishonesty, and a shortfall in a register is not by itself either. Reconciliation failures, poor record-keeping and disputed targets do not become criminal because money is missing on paper. For an employee: this is cognizable and non-bailable, and an FIR can be registered without a court's order, so an allegation of this kind should be taken seriously from the first day, including advice about anticipatory bail under Section 482 BNSS.
Section 316(3) covers a carrier, wharfinger or warehouse-keeper, at seven years. Goods delivered to a transporter are the textbook entrustment: ownership stays with the consignor, the carrier holds them for a purpose, and diverting or selling them is the offence.
The documentary trail is what decides these cases — the consignment note or bill of lading, the warehouse receipt, the delivery challan, the weighment slip and the gate records. Where the dispute is really about damage, shortage in transit or a freight bill, it is a civil and often a contractual matter, and the carriage documents will usually show which it is.
Because every sub-section is cognizable, an FIR should be registered at the police station in whose area the entrustment or the misappropriation took place. The larger and more organised matters — company frauds, investment schemes, real estate and financial frauds — are handled by the Economic Offences Wing of Delhi Police, whose published list of categories includes criminal breach of trust.
People often ask what value threshold sends a case to the EOW. Delhi Police's own page for the Wing states that it takes up cases involving an amount of not less than three crore rupees. Below that, and for a single transaction between two people whatever the amount, the local police station is where the case belongs. Confirm the current position at the Wing, since published thresholds are revised from time to time — and describe your case by category as well as by amount.
| Step | What to do | Provision |
|---|---|---|
| 1 | Give the written complaint at the police station and get a receipt or diary entry number | BNSS 173 |
| 2 | If registration is refused, send the substance in writing, by post, to the DCP, keeping the despatch record | BNSS 173(4) |
| 3 | If still nothing, apply to the Magistrate on affidavit, showing you exhausted step 2 | BNSS 175(3) |
| 4 | Alternatively, file a private complaint before the Magistrate — noting the new requirement that the accused be heard before cognizance is taken | BNSS 223 |
| Court complex | Broadly serves |
|---|---|
| Tis Hazari | Central and West Delhi |
| Rohini | North and North-West Delhi |
| Karkardooma | East, North-East and Shahdara |
| Saket | South and South-East Delhi |
| Dwarka | South-West Delhi |
| Patiala House | New Delhi district |
Delhi has more police districts than judicial districts and the boundaries do not map neatly. Confirm the current allocation from the Delhi District Courts website or the filing counter before you travel.
The BNSS allows a police officer, with the prior permission of an officer not below the rank of Deputy Superintendent of Police, to conduct a preliminary enquiry of up to fourteen days before registering an FIR, for cognizable offences falling within a defined punishment band.
Where that band applies, the effect on Section 316 is uneven, and it is worth knowing which side of the line you are on:
This page explains the law in general terms. It cannot tell you what to do about your own facts — only an advocate who has read your papers can do that. You can look through the advocates associated with Legal Space Services who practise in criminal and commercial matters, see their enrolment details and areas of practice, and send a consultation request. Searching and sending a request are free.
The criminal case punishes. It does not, by itself, return the money or the jewellery. What actually recovers property:
| Route | What it does |
|---|---|
| Attachment of proceeds of crime — Section 107 BNSS | The police, with senior approval, apply to the court to attach property that is the proceeds of crime; on confirmation the District Magistrate distributes it among the affected persons. New under the BNSS, and only useful before the property moves — raise it early |
| Compensation — Section 395 BNSS | The court may apply a fine to compensating the victim, and may order compensation even where no fine is imposed |
| Custody and disposal of property | Where the property itself has been seized during investigation, the court can order its interim custody or its return. Ask about this immediately if the goods or jewellery have been recovered |
| Civil suit for recovery | The proceeding actually designed to make you whole. Where the claim rests on a written contract, a summary suit may be quicker |
| Domestic Violence Act — for stridhan | Deprivation of stridhan is economic abuse under that Act, and an application to the Magistrate can seek its return with the Act's other reliefs |
The defences that work here are structural — they attack an ingredient rather than a fact — which is why so many commercial FIRs under this section are quashed.
Because every sub-section is non-bailable, the first application is often anticipatory bail under Section 482 BNSS rather than a quashing petition. They are different petitions seeking different relief, and the order in which they are filed matters.
It is criminal breach of trust. Sub-section (1) defines it; the rest punish it according to who the accused was. Sub-section (2) is the general offence at five years. Sub-section (3) covers a carrier, wharfinger or warehouse-keeper and sub-section (4) a clerk or servant, both at seven years. Sub-section (5) — a public servant, banker, merchant, factor, broker, attorney or agent — carries imprisonment for life or up to ten years.
316(1) is the old Section 405, 316(2) is 406, 316(3) is 407, 316(4) is 408 and 316(5) is 409. No category was added or removed. It is a consolidation, not a rewrite.
One did, and it is the one that matters most. The general offence went from three years to five. Several widely-read pages still say three, and at least one states in terms that the BNS "keeps the same punishment structure". It does not. The other sub-sections carry the same sentences as before.
Section 318 is cheating. The two are mutually exclusive on the same facts. Breach of trust starts with a lawful handover — the property was properly entrusted and then misused. Cheating means the property was obtained by deception, so it was never lawfully entrusted at all. The Supreme Court held in Delhi Race Club (2024) that both cannot co-exist on one set of facts.
No. The limitation rules apply only to offences punishable with up to three years, and every sub-section of Section 316 carries more than that. This is worth knowing in old stridhan and old employment matters, where people are frequently told, wrongly, that they are too late.
Three. That property was entrusted to the accused, or that he was given dominion over it. That he dishonestly misappropriated it, converted it to his own use, or used or disposed of it in violation of a direction of law or of a legal contract. And that he did so dishonestly — meaning with the intention of causing wrongful gain to himself or wrongful loss to the owner.
That the person handing over the property remains its owner, and hands it over in circumstances that create a relationship of confidence. The Supreme Court has put it as the owner continuing to be the owner, and having confidence in the person taking the property so as to create a fiduciary relationship. Critically, the property must belong to someone other than the accused.
No. A debt is a debtor-creditor relationship, not an entrustment. The Supreme Court said in 2024 that prosecuting for breach of trust because the consideration for goods sold was not paid is flawed to the core, and that there can be a civil remedy for non-payment but no criminal case. It repeated the point in 2026 — mere non-payment of a balance amount cannot give rise to this offence.
Ordinarily no. The Supreme Court held in 2026 that a refundable security deposit paid as consideration is not an entrustment of property. That makes it a civil recovery matter. Any page telling you an FIR is the answer to a withheld deposit is setting you up for a complaint that goes nowhere.
An error of judgment is not the offence. The Supreme Court has said so in terms in the context of the agent and banker sub-section. What is required is dishonesty, not incompetence.
Yes, and the section says so expressly. There are Explanations providing that where an employer deducts the employee's contribution to the provident fund or the Employees' State Insurance from wages, that amount is deemed to have been entrusted to him, and on default he is deemed to have dishonestly used it. There is also a separate offence under the Employees' Provident Funds Act carrying a mandatory minimum sentence where the employee's deducted contribution is not remitted. Note that the deeming provisions cover the employee's share, not the employer's own contribution.
Stridhan is your absolute property. The Supreme Court said in 2024 that it is the woman's absolute property with all rights to dispose of it at her pleasure, and that the husband has no control over it — he may use it in distress but is obliged to restore it or its value. Where jewellery and gifts were handed to the husband or his family, the courts have treated that as an entrustment for the purposes of this section, without needing any special agreement. There is also a civil route through the Protection of Women from Domestic Violence Act, under which depriving a woman of stridhan is expressly economic abuse.
Very likely not, on two grounds. First, no limitation applies to this offence at all under the new law. Second, the Supreme Court has held that retention of stridhan is a continuing wrong, and that judicial separation does not end the domestic relationship for these purposes.
Usually not, and the reason is structural. Every partner has dominion over partnership property by virtue of being a partner, so simply using it is not misappropriating someone else's property. The Supreme Court has held that a partner can be liable only where dominion over the assets was, by a special agreement between the parties, entrusted to him. Without that agreement the remedy is an action for accounts.
That is squarely the agent limb — sub-section (5), which carries life or up to ten years. An attorney or agent is one of the named categories, and money received on the principal's behalf and retained is the classic case.
Yes. Every sub-section of Section 316 is cognizable and non-bailable. That is a significant difference from cheating, where only Section 318(4) is cognizable.
Often it is not. The Supreme Court held in Delhi Race Club that the penal law contains no provision attaching vicarious liability to office bearers of a company, and that they can be arrayed as accused only where direct allegations are levelled against them personally. Some statutes do provide for it — the cheque-bouncing law is the obvious example — but the BNS does not. An FIR that names a whole board without saying what each person did is defective as to those individuals.
It depends on the sub-section, and the pattern is counter-intuitive. Sub-sections (2) and (4) are compoundable by the owner with the permission of the court. Sub-section (3) — the carrier and warehouse-keeper limb, which carries seven years — is compoundable without permission. Sub-section (5) is not compoundable at all. Have the position for your own sub-section checked against the bare Act.
Yes, and commercial ones frequently are. The arguments that succeed are structural: there was no entrustment because the relationship was one of sale or loan; the property was the accused's own or jointly owned; the complaint alleges non-payment rather than misappropriation; or a director has been named with no act attributed to him. The petition goes to the High Court under Section 528 of the BNSS.
The criminal case punishes; it does not by itself repay. The BNSS now allows the police, with senior approval, to apply to the court to attach the proceeds of crime, after which the District Magistrate distributes them among the affected persons. A court may also order compensation. Alongside that, a civil suit for recovery, and for stridhan the reliefs available under the Domestic Violence Act, are the proceedings actually designed to make you whole.
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