Distinction between entrustment and lending: Non-repayment of a loan constitutes a civil breach of contract, not criminal breach of trust.

The applicants (the father-in-law and brother-in-law of the complainant’s son) were summoned for an offense under Section 406 IPC (Criminal Breach of Trust).

The matrimonial relationship between the applicant's daughter and the complainant’s son had soured due to alleged dowry demands

The complainant alleged that on July 30, 2017, applicant no. 1 borrowed Rs. 1,00,000/- to purchase a plot because he was short of funds

The summoning order was challenged on the grounds that the transaction was a civil loan rather than criminal entrustment

1. Whether the act of lending money to a relative for a specific purchase constitutes "entrustment of property" under Section 405 IPC or a civil "lending" transaction

2. Whether the complaint disclosed the essential ingredients of Section 406 IPC (Criminal Breach of Trust) to justify the summoning order

Section 405 IPC, which defines criminal breach of trust as the dishonest misappropriation of property by a person to whom it was "entrusted"

Binod Kumar v. State of Bihar to establish that prosecution must prove both entrustment and dishonest misappropriation

The court distinguished between "entrustment" (returning property handled according to instructions) and "lending" (delivery for the borrower's own use, governed by the law of bailment/contract)

Anand Kumar Mohatta v. State (Govt. of NCT of Delhi) for quashing proceedings where ingredients are missing

Indian Oil Corporation v. NEPC India Ltd. regarding the distinction between civil breaches and criminal offenses

Delhi Race Club (1940) Ltd. v. State of U.P. regarding the non-criminalization of commercial/debt disputes without evidence of dishonest intent

The court reasoned that "entrustment" requires a voluntary handover of property for a specific service or purpose with a clear expectation of return or specific handling, whereas "lending" allows for temporary use by the borrower

In this case, the complainant's own admission was that money was provided to the applicant to enable him to buy a plot because he was "short of finances"

This transaction lacked clear instructions on how the money was to be managed as a trust; rather, it functioned as a loan

The court observed that mens rea—specifically "dishonest intention" under Section 24 IPC—is the lynchpin of the offense

Since the dispute was essentially a failure to repay a debt in a domestic context, it remained a civil matter. The Magistrate failed to distinguish between a breach of contract and a criminal offense, resulting in a non-application of judicial mind

It held that the summoning order dated July 10, 2019, was unsustainable as it failed to satisfy the legal ingredients of Section 406 IPC

Consequently, the High Court allowed the application under Section 482 Cr.P.C. and quashed the summoning order and the proceedings in Complaint Case No. 629 of 2017