An overview of 405 & 406 of PPC

Sections 405 and 406 of the Pakistan Penal Code (PPC) address criminal breach
of trust and the penalties associated with such offenses. Below is a detailed
explanation of these provisions, along with references to landmark judgments
interpreting them:

Section 405: Criminal Breach of Trust

Definition:
Section 405 defines "criminal breach of trust" as an act where a person, who is
entrusted with property or dominion over it, dishonestly misappropriates or
converts it for their own use, or uses it in violation of any direction of law or any
legal contract regarding the mode of its discharge.

Key Elements:
1. Entrustment: The accused must have been entrusted with property or had
control over it.
2. Dishonest Misappropriation or Use: The accused dishonestly
misappropriates or converts the property for personal use.
3. Violation of Contract or Legal Directions: There must be a breach of a
specific legal or contractual obligation regarding the property.

Section 406: Punishment for Criminal Breach of Trust

Penalty:
Section 406 prescribes punishment for criminal breach of trust, which may extend
to:
• Imprisonment: Up to 3 years, or
• Fine: An amount decided by the court, or
• Both.

Landmark Judgments and Legal Interpretations

1. Muhammad Sadiq v. State (2007 SCMR 784)
The Supreme Court of Pakistan clarified the elements of "entrustment" and
"dishonest intent" in this case. The court held that mere failure to return property
does not constitute criminal breach of trust unless the prosecution proves
dishonest intention.
2. Syed Mansoor Ali Shah v. State (PLD 2004 Lahore 204)
This case emphasized the importance of proving entrustment and the accused's
control over the property. The court observed that a breach of civil obligations
(e.g., failure to repay a loan) does not automatically convert into a criminal
offense unless fraudulent intent is established.
3. The State v. Amanullah Khan (PLD 1998 Karachi 122)
In this case, the court underscored the distinction between civil liability and
criminal breach of trust. It held that the prosecution must demonstrate beyond
reasonable doubt that the accused acted dishonestly and violated a legal or
contractual trust.
4. Ghulam Muhammad v. State (1983 SCMR 1056)
The court ruled that the entrustment of property must be proved through reliable
evidence, and any ambiguity in the contract or agreement will be construed in
favor of the accused.
Distinction Between Criminal and Civil Breach of Trust
One of the critical issues courts have dealt with is distinguishing between criminal
breach of trust under Section 405 and a breach of civil trust. Pakistani courts have
consistently held that:
• Criminal Intent: To invoke Section 405/406, the prosecution must prove
dishonest intent beyond a reasonable doubt.
• Civil Disputes: Simple breach of contract or failure to fulfill a financial
obligation is a civil matter unless it is shown that the accused acted
dishonestly from the outset.
Sections 405 and 406 of the PPC play a vital role in addressing trust-related
crimes. The courts in Pakistan have set a high threshold for proving criminal
breach of trust to prevent its misuse in civil disputes. Entrustment and dishonest
intent remain the two pillars of these offenses, and the burden of proof lies
heavily on the prosecution.
That term the “Criminal Breach of Trust” was defined in a
celebrated judgment by the honorable Lahore High Court reported
as 2019 Pcr. LJ 1622 & it was held as followed;
“An offence of criminal breach of trust defined by
section 405, P.P.C. is constituted and the same is
punishable under section 406, P.P.C. if some property is
given on trust & the same property is to be returned”.
That in its another judgment reported as 2019 MLD 346 the
honorable Lahore high court held that;
“Mere mentioning the word “Amanat” (Trust), in the
contents of the FIR would not attract the provisions of S.
405, P.P.C., Punishable under S. 406, P.P.C., when
otherwise ingredients of the said offence were not
attracted from the contents of the FIR”.

PLJ 2020 Cr.C. (Note) 21

[Lahore High Court, Multan Bench]
Present: CH. MUSHTAQ AHMAD, J.
SHAUKAT ALI--Petitioner
versus
STATE and another--Respondents
Crl. Misc. No. 6325-B of 2017, decided on 3.11.2017.
Criminal Procedure Code, 1898 (V of 1898)--
----S. 498--Pakistan Penal Code, (XLV of 1860), S. 406--Pre-arrest bail, confirmed--
Allegation of--Misappropriate the amount--Allegation against petitioner according to
FIR is that he misappropriated an amount of Rs. 2,10,000/-which was given to him by
complainant as trust--Matter was reported to police after about 1½ year of the alleged
occurrence--According to police investigation, matter was criminal breach of trust--In
such backdrop, case against petitioner calls for further inquiry--
Petitioner has already joined investigation--Sending him behind the bars at this stage
would serve no useful purpose--Petition was allowed. [Para 3] A
Rana Jahan Zaib Khan, Advocate with Petitioner.
Mr. Hassan Mahmood Khan Tareen, Deputy Prosecutor General for State.
Complainant in Person.
Date of hearing: 3.11.2017.
ORDER
This petition has been moved by Shaukat Ali accused in case FIR No. 350/2017
dated 23.09.2017 under Section 406, PPC registered at Police Station Kacha Khooh,
District Khanewal seeking pre-arrest bail.
2. Arguments heard and record perused.
 3. Allegation against petitioner according to FIR is that he misappropriated an
amount of Rs. 2,10,000/-which was given to him by complainant as trust. Matter was
reported to police after about 1½ year of the alleged occurrence. According to police
investigation, matter was not of criminal breach of trust. In such backdrop, case against
petitioner calls for further inquiry. Petitioner has already joined investigation. Sending
him behind the bars at this stage would serve no useful purpose. Therefore, petition in
hand is allowed and
ad-interim pre-arrest bail already granted to the petitioner by this Court is confirmed,
subject to his furnishing bail bonds in the sum of Rs. 1,00,000/- with one surety in the
like amount to the satisfaction trial of Court.

(A.A.K.) Bail Confirmed

PLJ 2020 Cr.C. (Note) 25

[Lahore High Court, Bahawalpur Bench]
Present: TARIQ IFTIKHAR AHMAD, J.
AZHAR FAROOQ--Petitioner
versus
STATE, etc.--Respondents
Crl. M. No. 3218-B of 2017, decided on 7.12.2017.
Criminal Procedure Code, 1898 (V of 1898)--
----S. 498--Pakistan Penal Code, (XLV of 1860), S. 406--Anticipatory bail, confirmed--
Allegation of--Misappropriated sugar--FIR in this matter has been got recorded after a
delay of 21 months--Though an attempt has been made by the complainant to explain
the delay but not a single word has been stated in this regard rather that facts have
been stated in routine which prima facie is not sufficient to explain the delay--Such a
delay in lodging the FIR caused serious doubt about the veracity of prosecution
version--Offence in which the petitioner is charged does not attract the prohibitory
provision of Section 497 of the Criminal Procedure Code, 1898--Application for
anticipatory bail is allowed and order granting ad-interim anticipatory bail is
confirmed. [Para 6 & 7] A
Mr. Zafar Iqbal Awan, Advocate alongwith Petitioner.
Mr. Sultan Qadir, Advocate for Complainant.
Mr. Najeeb Ullah Jatoi, Deputy Prosecutor General for Respondent.
Date of hearing: 7.12.2017.
ORDER
The petitioner seeks anticipatory bail in case FIR No. 298 of 2017, registered
under Section 406 of the Pakistan Penal Code, 1860, at Police Station City Chishtian,
District Bahawalnagar.
2. According to FIR the accusation contained against the petitioner is that he
misappropriated 2010 sacks of sugar which the complainant had kept into his godown.
3. The learned counsel for the petitioner contends that the petitioner is innocent;
he has been falsely roped in this case by the complainant with mala fide intentions and
ulterior motives; there is a delay of more than 21 months in registration of FIR and as
such the same is sufficient to indicate that the FIR has been got lodged after due
deliberations and consultations. Argues that there is business dispute between the parties
and the story narrated in the FIR is fabricated. Lastly contends that the offence, in which
the petitioner is involved, does not fall within prohibitory clause of Section 497 of The
Criminal Procedure Code, 1898.
4. On the other hand learned Deputy Prosecutor General assisted by learned
counsel for the complainant, after going through the record, has vehemently opposed this
bail petition on the grounds that the petitioner is named in the FIR with specific role.
Further contends that bail before arrest is an extraordinary relief meant for innocent
persons but the petitioner is fully involved in this case; during investigation he has been
found connected by the investigating officer with the commission of offence alleged
against him.
 5. I have heard the learned counsel for the petitioner, the learned Deputy
Prosecutor General and the learned counsel for the complainant and have also gone
through the record of this case.
6. It has been noticed that the FIR in this matter has been got recorded after a
delay of 21 months. Though an attempt has been made by the complainant to explain the
delay but not a single word has been stated in this regard rather that facts have been
stated in routine which prima facie is not sufficient to explain the delay. Such a delay in
lodging the FIR caused serious doubt about the veracity of prosecution version. The
offence in which the petitioner is charged does not attract the prohibitory provision of
Section 497 of the Criminal Procedure Code, 1898.
7. Pursuant to above, application for anticipatory bail is hereby allowed and the
order granting ad-interim anticipatory bail to the petitioner is confirmed subject to his
furnishing fresh bail bonds in the sum of Rs. 200,000/- (Rupees two hundred thousand)
with one surety in the like amount to the satisfaction of learned trial Court.
8. It is, however, made clear that the observation in this order is tentative in
nature and would not effect the case of either party at the trial.
(A.A.K.) Bail confirmed..

PLJ 2020 Cr.C. (Lahore) 369

Present: FAROOQ HAIDER, J.
ASIM AHMAD--Petitioner
versus
STATE, and another--Respondents
Crl. Misc. No. 64651-B of 2019, decided on 23.12.2019.

Criminal Procedure Code, 1898 (V of 1898)--

----Ss. 497(2) & 498--Pakistan Penal Code, (XLV of 1860), S. 406--Pre-arrest bail, grant
of--Further inquiry--It is own case of the prosecution that accused was doing business
of property and four years prior to the registration of instant case he asked the
complainant for paying Rs.30,00,000/- (thirty lacs) because he is making a deal of
property and resultantly complainant paid him said amount which has not been paid
back by accused/petitioner; therefore, it is crystal clear that aforementioned amount
was given by complainant and taken by petitioner/accused as loan with promise to pay
back the same when his deal of property will be cleared; which is purely a civil
dispute regarding non-payment of amount which was taken as loan and prima facie
any offence punishable under Section 406, PPC is not made out because basic
ingredient of Section 405, PPC punishable under Section 406, PPC is missing--
Therefore, case of the petitioner falls in the ambit of further inquiry i.e. Section 497
(2), Cr.P.C.--Bail confirmed.
[Pp. 370 & 371] A & B
2015 SCMR 1575 ref.
Mr. Abdul Samad Khan Basria, Advocate along with Petitioner.
Ch. Hasham Hayat Wathra, Advocate for Complainant.
Rai Akhtar Hussain, Deputy Prosecutor General for State.
Date of hearing: 23.12.2019.

ORDER
Through this petition, Asim Ahmad petitioner has sought pre-arrest bail in case
arising out of F.I.R. No. 1526 of 2019 dated 10.08.2019 registered under Section 406,
PPC at Police Station North Cantt., District Lahore.
2. After hearing learned counsel for the petitioner, learned counsel for the
complainant, learned Deputy Prosecutor General and going through the record with their
assistance it has been noticed that it is own case of the prosecution that Asim Ahmad
accused was doing business of property and four years prior to the registration of instant
case he asked the complainant for paying Rs.30,00,000/- (thirty lacs) because he is
making a deal of property and resultantly complainant paid him said amount which has
not been paid back by Asim Ahmad accused/petitioner; therefore, it is crystal clear that
aforementioned amount was given by complainant and taken by petitioner/accused as
loan with promise to pay back the same when his deal of property will be cleared; which
is purely a civil dispute regarding non-payment of amount which was taken as loan
and prima facie any offence punishable under Section 406, PPC is not made out because
basic ingredient of Section 405, PPC punishable under Section 406, PPC is missing. In
this regarding guidance has been sought from the dictum laid by the august Supreme
Court of Pakistan in case “Rafiq Haji Usman vs. Chairman NAB and another” (2015
SCMR 1575), relevant portion is reproduced as under:
“In case of entrustment, the money/property received is to be retained for return
to the giver at a later lime as opposed to a promise or contract where investment
is made or money is paid for the purposes of fulfilment of a specific agreed upon
purpose/contract. In such a case where money/property has been entrusted to a
person, using such amount/property for any other purpose would not attract the
penal consequences of Section 405, PPC ibid. For the purposes of above view,
we draw support from the judgment of this Court reported as Shahid Imran v.
The State and another (2011 SCMR 1614), wherein it has been held “The law
clearly recognizes a distinction between payment/investment of money and
entrustment of money or property as in the former case the amount of money paid
or invested is to be utilized for some purpose whereas in the latter case that sum
of money or property is to be retained and preserved for its return to the given
and the same is never meant to be utilized for any other purpose……. a mere
breach of a promise, agreement or contract does not ipso facto attract the
definition of criminal breach of trust contained in Section 405, P.P.C. and such a
breach is nor synonymous with criminal breach of trust without there being a
clear case of entrustment.”

Therefore, case of the petitioner falls in the ambit of further inquiry i.e. Section 497
(2), Cr.P.C. It goes without saying that instant FIR was registered on 10.08.2019 after
filing of suit by present petitioner for restitution of conjugal rights on 29.06.2019
against Safia Asim i.e. his 1st wife, who is sister of complainant and suit for recovery of
golden ornaments and money on 23.07.2019 against his aforementioned first wife
and Rafaqat Ali (present complainant), etc. Furthermore when aforementioned civil
transaction has been converted into registration of a criminal case by the complainant
after joining hands with the police after delay of about four years then prima facie, mala
fide intention on part of prosecution cannot be out rightly ruled out.
3. In view of what has been discussed above, application filed by the petitioner
for grant of pre-arrest bail, is allowed, ad-interim pre-arrest bail already granted to him by
this Court vide order dated 29.10.2019 is hereby confirmed subject to his furnishing fresh
bail bonds in the sum of Rs.200,000/- (Rupees two hundred thousand only) with two
sureties in the like amount to the satisfaction of the learned trial Court within a period of
fifteen days from today.
4. It is, however, clarified that observations made herein are just tentative in
nature and strictly confined to the disposal of this bail petition.
(A.A.K.) Bail confirmed

2015 SCMR 1575 titled as Rafiq Haji Usman v. Chairman,

NAB and another it was held that:-
Equalant citation: PLJ 2020 SC (Cr.C.) 94
"an essential element for making out and establishing a case of
criminal breach of trust is the entrustment of property or money or
with any dominion over property, which is dishonestly
misappropriated or dishonestly used or disposed in violation of any
direction prescribed by law or the mode in which such trust was to
be discharged or in the context any contract etc., however the
promise to sell the property for which consideration/money is paid
or an agreement to sell is entered upon and the money has been
paid pursuant to such an agreement, it shall not the same as
entrustment of property within the concept of noted provision. In
case of entrustment, the money/property received is to be retained
for return to the giver at a later time as opposed to a promise or
contract where investment is made or money is paid for the
purposes of fulfillment of a specific agreed upon purpose/contract. In
such a case where money/property has been entrusted to a person,
using such amount/property for any other purpose would not attract
the penal consequences of section 405 ibid”.

Shahid Imran v. The State and another (2011 SCMR 1614),

Wherein it has been held that;
"The law clearly recognizes a distinction between
payment/investment of money and entrustment of money or
property as in the former case the amount of money paid or invested
is to be utilized for some purpose whereas in the latter case that
sum of money or property is to be retained and preserved for its
return to the giver and the same is never meant to be utilized for any
other purpose...a mere breach of a promise, agreement or contract
does not ipso facto attract the definition of criminal breach of trust
contained in section 405, P.P.C. and such a breach is nor
synonymous with criminal breach of trust without there being a
clear case of entrustment".

Crl.A No.154-L/2013
IN THE SUPREME COURT OF PAKISTAN
(Appellate Jurisdiction)
PRESENT:
Mr. Justice Manzoor Ahmad Malik
Mr. Justice Sardar Tariq Masood
Mr. Justice Syed Mansoor Ali Shah
Criminal Appeal No.154-L of 2013, and
Criminal Petition No.366-L of 2013.
(on appeal from the judgment of Lahore High Court,
Lahore dated 26.02.2013, passed in Crl.A No.1053/2007)
Ali Ahmad (in Crl.A-154-L/13) …Appellant
Imtiaz Ahmad (in Crl.P-366-L/13) …Petitioner
Versus
The State & another (in Crl.A-154-L/13)
Ali Ahmad, etc (in Crl.P-366-L/13)
…Respondents
8- In a criminal trial, it is now jurisprudentially well entrenched, the
proper course for the court is to first discuss and assess the
prosecution evidence, particularly the reliability of the eye-
witnesses, in order to arrive at the conclusion as to whether or not
the prosecution has succeeded in proving the charge against the
accused on the basis of its evidence.1 Burden is always on the
prosecution to prove its case and it is only when a prima facie case
is made out against the accused sufficient to justify his conviction.

1-See Ashiq Hussain v. State, PLD 1994

SC 879.
PLJ 2008 Cr.C. (Lahore) 289.
Accused received amount as earnest money which was treated to
be as trust and entered into an agreement to sell. No condition in
agreement to sell that earnest amount would be treated trust
amount. Non-compliance of agreement to sell does not constitute
any offence. Suit for specific performance was pending in Court of
competent jurisdiction. In the present case prima facie no offence
is made out against the accused. Direction to take disciplinary
action against SHO, who had registered the case in spite of fact
that it was dispute of civil nature between the parties which was
already pending before the Court of competent jurisdiction for
performance of agreement to sell. If the case was registered it
should have been cancelled on the very first date, when the
agreement to sell was brought on the record, which does not find
mention that the amount was to be treated as earnest money.

PLJ 2015 SC 1075

405. Criminal breach of trust.--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 willfully suffers any other person so to do,
commits “criminal breach of trust”.

7. In view of the above facts and circumstances of the case, as it is a

settled law that bail cannot be withheld as a matter of punishment, as
has been even held by the High Court, we find that the present case
being of civil nature and requiring further inquiry, the case not falling
strictly within the purview of the noted provisions, the petitioner is
entitled to bail, therefore, this petition is converted into an appeal and
allowed in terms of our short order.

-The End-

Writer:
Mian Asif Mehmood
Advocate High Courts of Pakistan
MSC. LLM
asifdoc@gmail.com
Islamabad