a mere dispute on monetary demand, does not attract criminal prosecution under Section 406 of the IPC.

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 2328 OF 2022

DEEPAK GABA AND OTHERS ... APPELLANTS

VERSUS

STATE OF UTTAR PRADESH AND ANOTHER ... RESPONDENTS

J U D G M E N T

SANJIV KHANNA, J

13. Section 406 of the IPC8 prescribes punishment for breach of trust 

which may extend to three years or with fine or with both, when 

ingredients of Section 405 of the IPC are satisfied. For Section 406 

of the IPC to get attracted, there must be criminal breach of trust in 

terms of Section 405 of the IPC.9

For Section 405 of the IPC to be attracted, the following have 

to be established:

(a) the accused was entrusted with property, or entrusted with 

dominion over property;

(b) the accused had dishonestly misappropriated or converted to 

their own use that property, or dishonestly used or disposed

of that property or wilfully suffer any other person to do so; 

and

(c) such misappropriation, conversion, use or disposal should be 

in violation of any direction of law prescribing the mode in 

which such trust is to be discharged, or of any legal contract 

which the person has made, touching the discharge of such 

trust.

14. Thus, criminal breach of trust would, inter alia, mean using or 

disposing of the property by a person who is entrusted with or 

otherwise has dominion. Such an act must not only be done

dishonestly, but also in violation of any direction of law or any 

contract express or implied relating to carrying out the trust.10

15. However, in the instant case, materials on record fail to satisfy the 

ingredients of Section 405 of the IPC. The complaint does not 

directly refer to the ingredients of Section 405 of the IPC and does 

not state how and in what manner, on facts, the requirements are 

satisfied. Pre-summoning evidence is also lacking and suffers on 

this account. On these aspects, the summoning order is equally 

10 Sudhir Shantilal Mehta v. Central Bureau of Investigation, (2009) 8 SCC 1. 

Criminal Appeal No.2328 of 2022 Page 12 of 23

quiet, albeit, it states that “a forged demand of Rs. 6,37,252.16p

had been raised by JIPL, which demand is not due in terms of 

statements by Shubhankar P. Tomar and Sakshi Tilak Chand”. A 

mere wrong demand or claim would not meet the conditions 

specified by Section 405 of the IPC in the absence of evidence to 

establish entrustment, dishonest misappropriation, conversion, use 

or disposal, which action should be in violation of any direction of 

law, or legal contract touching the discharge of trust. Hence, even 

if respondent no. 2 - complainant is of the opinion that the monetary 

demand or claim is incorrect and not payable, given the failure to 

prove the requirements of Section 405 of the IPC, an offence under 

the same section is not constituted. In the absence of factual 

allegations which satisfy the ingredients of the offence under 

Section 405 of the IPC, a mere dispute on monetary demand of Rs.

6,37,252.16p, does not attract criminal prosecution under Section 

406 of the IPC.