A, residing in Calcutta, is against for Z, residing at Delhi. There is an express or implied contract between A and Z, that all sums remitted by Z and A shall be invested by A, according to Z’s direction. Z remits a lakh of rupees to A, with directions to A to invest the same in Company’s paper. A in good faith, believing that it will be more for Z’s advantage to hold shares in the Bank of Bengal, disobeys Z’s directions, and buys shares in the Bank of Bengal, for Z, instead of buying Company’s paper. Z suffers loss. A is liable for

Option A: cheating

Option B: criminal breach of trust

Option C: criminal misappropriation

Option D: no offence is committed

Correct Answer

Option: d

Explanation

A’ commits no offence. Illustration (c) and (d) of section 405 IPC, (c) A, residing in Calcutta, is agent for Z, residing at Delhi. There is an express or implied contract between A and Z, that all sums remitted by Z to A shall be invested by A, according to Z’s direction. Z remits a lakh of rupees to A, with directions to A to invest the same in Company’s paper. A dishonestly disobeys the directions and employs the money in his own business. A has committed criminal breach of trust. (d) But if A, in the last illustration, not dishonestly but in good faith, believing that it will be more for Z’s advantage to hold shares in the Bank of Bengal, disobeys Z’s directions, and buys shares in the Bank of Bengal, for Z, instead of buying Company’s paper, here, thought Z should suffer loss, and should be entitled to bring a civil action against A, on account of that loss, yet A, not having acted dishonestly, has not committed criminal breach of trust.

Sample Mock Tests for Practice

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