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Mumbai University · FY LLB · Sem II
Ramesh, a senior executive in a multinational corporation, was found guilty of embezzling ₹50 lakhs from the company's f
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Ramesh, a senior executive in a multinational corporation, was found guilty of embezzling ₹50 lakhs from the company's funds over two years through fraudulent invoices and false reporting. He claims he was under financial stress and did not intend to harm the company.
Q3Situational QuestionsAttempt any 2 out of 4 · 6 marks each · Total: 12 marks2025
Q3.36 MarksRamesh, a senior executive in a multinational corporation, was found guilty of embezzling ₹50 lakhs from the company's funds over two years through fraudulent invoices and false reporting. He claims he was under financial stress and did not intend to harm the company.
Issues Raised

(a) State the kind of offence committed by Ramesh under BNS 2023.
(b) Does the motive of financial distress affect the severity of Ramesh's crime?
(c) How does Ramesh's position within the company influence the legal implications?

(a) Kind of Offence

Ramesh has committed the offence of Criminal Breach of Trust under BNS S316 (formerly IPC SS405–409). The offence is established when:

  • A person is entrusted with property or dominion over property (as a senior executive, Ramesh had this);
  • He dishonestly misappropriates or converts the property to his own use (diverting ₹50 lakhs through fraudulent invoices);
  • Or uses/disposes of the property in violation of the trust or legal direction.

Additionally, Ramesh is also liable for Cheating under BNS S318 for the fraudulent invoices and false reporting used to deceive the company.

(b) Effect of Financial Distress as Motive

No, the motive of financial distress does not negate or reduce the gravity of Ramesh's crime. Under BNS 2023, what constitutes criminal breach of trust is the dishonest intent to misappropriate — the reason why a person acts dishonestly is irrelevant to establishing the offence. Ramesh's deliberate use of fraudulent invoices demonstrates calculated dishonest intent. Financial distress may be considered by the court as a mitigating factor during sentencing but cannot negate criminal liability once all elements of S316 are satisfied.

(c) Impact of Ramesh's Position

Ramesh's senior executive position significantly aggravates his criminal liability. Under BNS S316(3), if the offence of criminal breach of trust is committed by persons in specific trusted roles (public servants, bankers, merchants, factors, brokers, attorneys, and agents), the punishment is enhanced to imprisonment up to 10 years + fine. Ramesh's senior executive position placed him in a position of high fiduciary trust toward the company, its shareholders, and its employees. Courts consistently apply stricter sentencing to persons in positions of trust who abuse that trust, as such offences undermine institutional integrity. The Supreme Court in P.D. Shamdasani v. Central Bank of India held that persons in trusted positions must be held to higher standards.