NISHANT
Mere breach of promise, agreement or contract does not, ipso facto, constitute offence of criminal breach of trust.
NISHANT MEHROTRA 5 Nov 2019

Mere breach of promise, agreement or contract does not, ipso facto, constitute offence of criminal breach of trust.


SC :: Penal Code, 1860 — Ss. 405 and 415 — Criminal breach of trust and cheating: Law recognises difference between simple payment/investment of money and entrustment of money or property. Mere breach of promise, agreement or contract does not, ipso facto, constitute offence of criminal breach of trust under S. 405 without there being clear case of entrustment. In context of contracts distinction between mere breach of contract and cheating would depend upon fraudulent inducement and mens rea. For sustaining these charges, existence of fraudulent or dishonest intention right at the beginning of transaction with mens rea must be shown. Breach of contractual obligations which are accompanied by fraudulent, dishonest or deceptive inducements resulting in involuntary and inefficient transfer stand criminalised under S. 415 IPC. 


Case:

Satishchandra Ratanlal Shah v. State of Gujarat

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