In case of the former, liabilities can be set-off by way of compensations while criminal liabilities attract provisions of various statutes in force at the time of commission of such offence.Ī director can be held criminally liable for non-compliances if they were responsible for supervising or conducting such business at the time of commission of offence. Such breach can be of both civil and criminal in nature. Therefore, a director is held liable in cases where there is a breach of duty on their part. The director of an organization is not only responsible to oversee the smooth flow of business but also has a fiduciary duty towards the company’s shareholders. Here, B criminally breaches the trust bestowed upon him by A. However, when the trustee misappropriates or converts such property to their own use, or fraudulently uses or disposes off the property, such a person is said to have committed a ‘breach of trust’.īreach of trust is, therefore, the inability of a trustee to fulfill their duties under the express/implied trust agreement entered with the trustor (real owner of the property).įor example, A lets his friend B stay at his farmhouse, and B uses the space to store illegal goods like drugs. The trustee, being in a fiduciary capacity, has an obligation to perform their duties in an honest manner and under the direction (if any) of the real owner. It is a form of ‘trust’ granted to the other person (trustee) by the owner (trustor). These exemptions and exclusions are listed under Section 23 of the Indian Trusts Act.ĭefined under Section 405 of the Indian Penal Code, a criminal breach of trust requires a person to bestow property or control over another person. While a trustee can find some relief against liability for technical breach, they can be held liable in certain cases. Covered under the Indian Trusts Act, 1882, this violation is often termed as ‘technical breach’. Such a breach or violation could occur when a trustee fails to fulfill their duty or acts in alteration to their obligation. In legal parlance, breach of trust can be classified into two categories:Ĭivil breach of trust, as the name suggests, does not amount to an offence under the law of land in force at the time of commission. This broken promise or violation, translated to legal terms, is known as ‘breach of trust’. What happens when someone makes a promise to you and does not keep it? Or when you delegate duty to another, but they fail to comply? There’s a violation, a promise that’s broken.
#Breach of trust consequences code#
It will focus on Criminal Breach of Trust and provisions laid out by the Indian Penal Code (IPC) and the Companies Act 2013. This article will try to discuss the legal perspective regarding breach of trust and throw light upon various facets of the subject, including types, distinctions from other acts / offences, etc.
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