No criminal breach of trust under Section 406 IPC if property only retained, not misappropriated: Kerala High Court

Justice Raja Vijayaragahavan V made the observation while quashing a case filed against a man under Section 406, IPC for allegedly retaining several blank checks from his colleagues as a security.

The Kerala High Court recently held that the offence of breach of trust under Section 406 of the Indian Penal Code (IPC) will be attracted only if there is misappropriation of property and not simply because there was retention of some property entrusted to a person [KO Antony v State of Kerala & Anr.].

Justice Raja Vijayaragahavan V made the observation while quashing a case filed against a man (petitioner) for allegedly retaining several blank cheques from his colleagues as security.

“Mere retention of property entrusted to a person without any misappropriation cannot fall within the ambit of criminal breach of trust. Unless there is some actual use by the accused in violation of law or contract, coupled with dishonest intention, there is no criminal breach of trust. The second significant expression is ‘misappropriates’, which means improperly setting apart for one’s use and to the exclusion of the owner,” the Court observed.

By way of background, the petitioner was a headload worker in the Air Cargo section of the Cochin International Airport Ltd. (CIAL). He was also the Secretary of the CIAL Air Cargo Loading and Unloading Workers Union.

The petitioner was accused of collecting cheques from his colleagues to pay legal fees allegedly required to fight a case concerning the employment status of CIAL workers.

He allegedly told them that a lawyer would be needed to fight the case and that the workers would have to pay their share of the legal fees.

To this end, the petitioner is stated to have collected blank cheques from these workers as security and refused to return them when the workers demanded them later.

This prompted one of the workers from Union, TP Babu to file a complaint against the petitioner.

Advocate Ashkar, appearing for the petitioner, contended that in order to attract the offence under Section 406 IPC, it has to be proved that the accused person misappropriated or converted the property for his own use.

He argued that there was no such misappropriation in this case. Rather, he contended that the cheque was retained by the petitioner following a decision by the General Body of the Union.

The High Court, in turn, noted that the prosecution had no case that the petitioner had dishonestly misappropriated any property entrusted to him.

“Admittedly, except for retaining blank cheques in his possession, the petitioner has neither dishonestly used nor disposed of the same,” the judge found.

Neither the first information report (FIR) nor the evidence collected during the investigation disclosed the commission of any offence by the petitioner, the Court observed.

Therefore, the High Court quashed the case.

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