Entrustment and dishonest misappropriation were absent in a gratuity dispute, so criminal breach of trust was not made out.

Criminal breach of trust requires entrustment of property or dominion over it, followed by dishonest misappropriation or conversion in violation of law or contract. In relation to gratuity, employees have no proprietary interest in any created fund and the employer's liability is only to pay gratuity on qualifying events; the Payment of Gratuity Act operates as a complete code, and income-tax rules on approved gratuity arrangements do not create entrustment in favour of employees. On the facts, no material showed entrustment to the company or dishonest conversion for its own use, and the ingredients of cheating under Section 418 IPC were also absent, so the complaint could not justify summoning and its dismissal was upheld.

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Issues: Whether the complaint disclosed the essential ingredients of criminal breach of trust or cheating so as to justify summoning of the accused, and whether the dismissal of the complaint was liable to be interfered with.

Analysis: For offences under Sections 405 and 406 of the Indian Penal Code, the foundational requirement is entrustment of property or dominion over property, followed by dishonest misappropriation, conversion, or use in violation of law or contract. In the context of gratuity, the amount is not contributed by employees and no employee has any proprietary interest in a created gratuity fund; the employer's liability is to pay gratuity on retirement, death, or other qualifying events. The Payment of Gratuity Act, 1972 operates as a complete code governing entitlement and payment, while the income-tax provisions concerning approved gratuity arrangements affect deductibility and compliance but do not create entrustment in favour of employees. On the facts, there was no material showing that the amount was entrusted to the company in the manner required for criminal breach of trust, nor any evidence of dishonest conversion for its own use. The ingredients of Section 418 of the Indian Penal Code were also not attracted.

Conclusion: The complaint did not disclose the necessary ingredients of the alleged offences, and the order dismissing the complaint was upheld.

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