Does the receipt of money by a supplier as the price of goods or as an advance for goods to be supplied under a contract amount to entrustment so as to attract the offence of criminal breach of trust under Section 316(2) of the Bharatiya Nyaya Sanhita, 2023 (BNS) if the goods are not delivered?
Coram: Augustine George Masih; Sanjay Karol
No. Criminal breach of trust presupposes entrustment, requiring that the beneficial interest in the property remain with the person handing it over while the recipient takes no more than custody or dominion for the benefit of another; money paid as the price of goods or in advance of supply passes to the supplier as his own, and if he takes the money and does not deliver, he is in breach of contract but has not committed a breach of trust, because there was no trust.
Bharatiya Nyaya Sanhita, 2023 — s.318(4) — s.316(2) — Cheating — Criminal breach of trust — Entrustment — Dishonest intention — Civil dispute given criminal overtone — Quashing of FIR — Article 226 — s.482 CrPC — Bharatiya Nyaya Sanhita, 2023 — s.318(4) — Cheating — Dishonest intention at inception — Held: A promise of future advantage becomes a deception only if it was made without any intention of performing it; where the first information report contains no averment of fact from which a dishonest or fraudulent intention at the inception of the transaction could be inferred, and the payments made were consistent with performance under a lawfully entered contract, the ingredients of the offence of cheating punishable under Section 318(4) of the Bharatiya Nyaya Sanhita, 2023 are not disclosed. (¶13, 14, 23) Bharatiya Nyaya Sanhita, 2023 — s.316(2) — Criminal breach of trust — Entrustment — Antithetical to cheating — Held further: Criminal breach of trust presupposes entrustment, requiring that the beneficial interest in the property remain with the person handing it over; money paid to a supplier as the price of goods or in advance of their supply passes to the supplier as his own and is not held in trust, so that in the absence of any averment of entrustment the offence under Section 316(2) BNS is not disclosed, and the two offences of cheating and criminal breach of trust, being antithetical, cannot both arise upon one indivisible set of allegations. (¶18, 19, 20) Article 226 — s.482 CrPC — Quashing of FIR — Civil dispute given criminal overtone — Held further: Where the allegations in a first information report, taken at their face value and accepted in their entirety, disclose no more than a dispute over price, supply and accounts arising out of a written commercial contract, to permit criminal proceedings to continue would be to permit that dispute to be pursued through the machinery of the criminal law, amounting to an abuse of the process of the court, and the FIR and all proceedings arising therefrom are liable to be quashed. (¶5, 22, 23, 24)
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