CRIMINAL BREACH OF TRUST.

LEGAL PROVISIONS AND DECIDED JUDGEMENTS ON CRIMINAL BREACH OF TRUST

Duncan Abeynayaka – LLB, Attorney At Law.

 

PENAL CODE PROVISIONS

388. 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 wilfully suffers any other person so to do, commits " criminal breach of trust".

389. Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.

390. Whoever, being entrusted with property as a carrier, wharfinger, or warehouse-keeper, commits criminal breach of trust in respect of such property, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

391. Whoever, being a clerk or servant or employed as a clerk or servant, and being in any manner entrusted in such capacity with property, or with any dominion over property, commits criminal breach of trust in respect of that property, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

392. Whoever, being in any manner entrusted with property, or with any dominion over property, in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney, or agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.

392a. Whoever, being entrusted with or having the dominion of any money in his capacity as a public servant, fails forthwith to pay over or produce when required to do so by the head of his department or by the Chief Secretary, Auditor-General, Assistant Auditor-General, or any officer specially appointed by the Governor to examine the accounts of his department, any money or balance of any money shown in the books or accounts or statements kept or signed by him to be held by or to be due from him as such public servant, or to duly account therefor, shall be guilty of the offence of criminal breach of trust, and shall on conviction be subject to the penalty provided by Section 392.

392b. Any person who, acting or purporting to act as the agent of any other person, receives from a postal officer any postal article for delivery to such' other person and—

(a) wilfully throws away, destroys, keeps, or secretes ; or

(b) without reasonable excuse (the burden of proving which shall lie upon him) fails to account for such article, or unduly delays such delivery,

shall be deemed guilty of criminal breach of trust, and shall be liable to the punishment prescribed therefor.

 

CODE OF CRIMINAL PROCEDURE ACT

165 (2) When the accused is charged with criminal breach of trust or dishonest misappropriation of movable property, it shall be sufficient to specify the gross sum or, as the case may be, the gross quantity in respect of which the offence is alleged to have been committed, and the dates between which the offence is alleged to have been committed without specifying particular items or exact dates, and the charge so framed shall be deemed to be a charge of one offence within the meaning of section 174:

Provided that the time included between the first and last of such dates shall not exceed one year.

 

The crucial components of the offence of criminal breach of trust are-

1. Entrustment of assets

2. Dishonest purpose of the accused

3. Misappropriation of property so entrusted or converted the assets to personal use of the accused to the detriment of the individual that has entrusted it at the accused.

 

DECIDED JUDGEMNTS

01. COORAY V. THE QUEEN 54 NLR 409

The offence of criminal breach of trust as an agent contrary to section 392 of the Penal Code is limited to the case of a person who carries on an agency business and does not comprehend a m an who is casually entrusted with money either on one individual occasion or on a number of occasions, provided the evidence does not establish that he carries on an agency business.

It will be observed that the widest and most general provision is that contained in section 388 inasmuch as it applies to all members of the public.

On the other hand sections 390 to 392 (A) apply to limited classes, treat their behaviour as more heinous and impose a heavier penalty. The final section 392 (B) which like 392 (A) is a later addition, creates a different crime and treats it as subject to the same penalties as those prescribed by section 389.

A man may casually misappropriate money and be guilty under sections 388 and 389 but he cannot be included in the limited classes struck at in 392 unless he is a member of one of the categories referred to.

Such a construction is, it is said, in conformity with the general scheme of the fasciculus of sections in which 392 is found. 390 applies to carrier, wharfinger, or warehouse keepers, and to no one else, 391 to clerks and servants or persons so employed and 392A to public servants.

Similarly 392 refers to several classes, it is true, but is confined to those types of persons who are members of the categories set out.

 

02. BASNAYAKE V. INSPECTOR OF POLICE (1961) 66 N.L.R. 379

In the absence of entrustment there can be no criminal breach of trust committed in respect of a sum of money received as security by an employer from an employee."

 

03. BASNAYAKE V. OFFICER IN CHARGE SPECIAL CRIME DETECTION UNIT ANURADHAPURA (1988) Sri L R 50

The inference of dishonest misappropriation or conversion is an essential ingredient of the offence under s. 391 of the Penal Code.

 

04. WALGAMAGE v. THE ATTORNEY GENERAL 2000 3 Sri LR. 1

Section 388 is even plainer: it refers to an ingredient of “entrustment” (which is anterior to and distinct from the dishonest misappropriation, conversion, use or disposal which is another ingredient), but does not require that there be an innocent intention at the time of entrustment.

“Entrustment” does not contemplate the creation of a trust with all the technicalities of the law of trust; it includes the delivery of property to another to be dealt with in accordance with an arrangement made either then or previously. That was the case here.

 

05. WICKRAMASINGHE KUDABANDA MUDIYANSELAGE VS. THE ATTORNEY GENERAL CA 244-246/2015

The ingredients necessary to prove an allegation under this Section are:

a. Entrustment with property or dominion over property, and

b. either

                                            I.            Dishonest misappropriation or conversion to his own use, Or

                                            i.            Dishonest user or disposal, or

                                          ii.            Willfully suffering any other to do b (i) or b (ii).

It should be noted that the core element that distinguishes criminal misappropriation from criminal breach of trust is Entrustment of Property.

Therefore, before moving in to the proof of other constituent elements of the offence, proof of entrustment is a fundamental.

Section 388 of the penal code does not restrict the property as movables or immoveable. In my view 'property' will depend on the circumstances of each case.

The simplest meaning of entrustment is handing over something into someone's care or protection.

The language of the section is very wide. The words used are "in any manner" entrusted with property. So it extends to entrustments of all kinds. Therefore Management of money amounts to entrustment when the words are given a meaning beyond textual interpretation. The board of directors who claim themselves as only managers of money cannot exonerate from their culpability by trying to draw a misleading and ambiguous distinction between the two concepts. In view of the evidence and circumstances, I will conclude that this court is satisfied that element of entrustment and dominion over the property is proved against all the three Accused Appellants.

Under Section 388 of the Penal Code, once the qualification of entrustment is proved, the actus reus of the offence has to be established by proving one of the following four ways:

1. Misappropriation or conversion of the property to his own use by the accused.

2. Use or disposal of the property in violation of any direction of law prescribing the mode in which the trust is to be discharged.

3. Use or disposal of property in violation of any legal contract, express or implied.

4. Suffering any other person to do any of these acts.

The Offences stipulated under the Penal Code, considered including a mental element only where a reference is made to a state of mind in the definition of the offence. As read in Section 388 of the Penal Code, criminal breach of trust includes the term "dishonestly" which requires the proof of mens rea on the part of the accused in order to convict an accused for the said offence.