Criminal breach of trust in partnership funds can extend to a working partner who misappropriates receipts for personal use.

A working partner who collected partnership outstandings and applied the money to his own use could fall within criminal breach of trust where he was entrusted with, or had dominion over, partnership property. The Court treated the provision as wide enough to cover misappropriation of partnership receipts, especially where the partner had no capital interest and was entitled only to profits after accounts were taken. Dishonest intention had to be inferred from the surrounding circumstances, and the absence of any explanation for the withdrawal strengthened that inference. On those facts, the conviction was sustained, while the sentence of rigorous imprisonment was reduced to simple imprisonment and the fine maintained.

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Issues: Whether a working partner who collected partnership outstandings and applied the money to his own use could be convicted for criminal breach of trust under the Indian Penal Code.

Analysis: The Court held that the language of the provision was wide enough to include a partner who was entrusted with, or had dominion over, partnership property. A working partner with no capital interest, who was entitled only to profits after accounts were taken, could misappropriate partnership receipts if he put money not yet shown to be his into his own pocket. The prosecution had to establish facts from which dishonest intention could necessarily be inferred, and the surrounding circumstances showed that the accused had no reasonable basis for treating the whole collection as his own share. The absence of any evidence from the accused to explain the withdrawal strengthened the inference of dishonest misappropriation.

Conclusion: The conviction for criminal breach of trust was sustained, and the appeal failed, though the sentence was reduced from rigorous imprisonment to simple imprisonment while the fine was maintained.

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