### Trustees misusing trust property for personal gain are liable for prosecution under Section 409 IPC as agents.

The Petitioner, Secretary of Shejar Chhaya Trust, was entrusted with obtaining the Charity Commissioner's sanction to sell 21 Gunthas of trust land.

It is alleged he fraudulently obtained sanction for 116.60 Gunthas, opened a forged bank account, and diverted Rs. 1.20 Crores to his personal trust.

FIR No. 639/2024 was registered under Sections 420, 465, 468, and 471 of the IPC, with Section 409 added later.

The Petitioner was arrested on October 6, 2025.

On December 9, 2025, he applied for default bail, arguing the 60-day period for filing a charge-sheet had expired.

The Magistrate rejected the plea, holding that Section 409 IPC (Criminal Breach of Trust by Agent) permits a 90-day investigation period.

The Petitioner challenged this via Writ Petition.

1. Whether a Trustee can be classified as an "agent" under Section 409 IPC to justify a 90-day period for filing a charge-sheet under Section 167(2) of the CrPC.

2. Whether the Magistrate is bound by the specific penal sections invoked by the police when determining entitlement to statutory bail.

The court applied Section 167(2) of the CrPC, 1973 (now Section 528 BNSS, 2023), which provides an indefeasible right to bail if the charge-sheet is not filed within 60 or 90 days depending on the gravity of the offence.

It interpreted Section 405 (Criminal Breach of Trust) and Section 409 (Aggravated Breach of Trust) of the IPC.

The court relied on *Alnesh Akil Somji v. State of Maharashtra* regarding the Magistrate's duty to look beyond police labels.

The court relied on *W. O. Holdsworth v. State of Uttar Pradesh* to define the legal relationship between a trustee and trust property.

The court relied on *R. K. Dalmia v. Delhi Administration* to define the legal relationship between a trustee and trust property.

The court relied on *CBI v. Duncans Agro Industries Ltd.* regarding the broad definition of "entrustment".

The Petitioner argued that as a Trustee, the property vested in him legally; thus, he held it "for the benefit of" beneficiaries but not "on behalf of" them as an agent, making Section 409 inapplicable.

The Court rejected this, clarifying that while the Magistrate must independently verify if a section is prima facie attracted.

Section 409 does not require an accused to be a "professional agent".

Relying on *R. K. Dalmia*, the court reasoned that the term "agent" includes anyone entrusted with property in the course of their duties.

The Court found that the Petitioner was specifically "entrusted" with the task of obtaining sanctions and handling sale proceeds for the Trust.

His alleged act of diverting funds into a forged account constituted a breach of this agency/trust.

Consequently, the offence fell under the 90-day bracket of Section 167(2).

The 60-day limit for filing the charge-sheet did not apply; the authorized period was 90 days.

The Writ Petition was dismissed, and the Rule was discharged.

The court clarified that these observations are limited to the determination of default bail and do not reflect on the final merits of the trial.