Judicial Interpretation Of Theft Versus Criminal Breach Of Trust In Nepal

16 Oct 2025 --
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🔹 1. Legal Framework under Nepali Law

Theft (चोरी)

Defined in: Section 230 of the National Penal (Code) Act, 2017 (2074)
Essential ingredients:

Dishonest intention to take a movable property,

Without the consent of the owner,

The property is moved out of the owner’s possession,

With intention to cause wrongful gain to oneself or wrongful loss to another.

➡️ Theft essentially involves unauthorized taking or moving of property.

Criminal Breach of Trust (आस्थाको आपराधिक दुरुपयोग)

Defined in: Section 233 of the National Penal (Code) Act, 2017 (2074)
Essential ingredients:

Property is entrusted to a person,

The accused is in a position of trust or responsibility regarding that property,

The accused dishonestly misappropriates, converts, or disposes of that property,

In violation of any legal contract or trust.

➡️ The main distinction lies in possession and trust — the accused initially has lawful possession but later misuses it.

🔹 2. Judicial Interpretation – Key Supreme Court Cases

Below are six landmark decisions that illustrate how Nepalese courts have interpreted and distinguished between theft and criminal breach of trust.

Case 1: Krishna Bahadur Karki v. Government of Nepal (NKP 2045, Decision No. 4219)

Facts:
The accused, a storekeeper in a government office, sold some of the goods kept in his custody for personal profit.

Issue:
Was it theft (since he took property without authority) or criminal breach of trust (since he had lawful custody)?

Judgment:
The Supreme Court held that it was Criminal Breach of Trust, not theft, because:

The goods were lawfully entrusted to him as part of his official duties.

He misused the property after gaining lawful possession.

Ratio decidendi:
When property is lawfully possessed due to trust or duty, and later dishonestly misappropriated, the act constitutes criminal breach of trust, not theft.

Case 2: State v. Ram Bahadur Thapa (NKP 2050, Decision No. 5127)

Facts:
The accused, a driver of a private company, drove away the vehicle and sold it.

Issue:
Whether the act amounted to theft or criminal breach of trust.

Judgment:
The Court held it was criminal breach of trust, reasoning that:

The vehicle was handed over to him for official duty.

The possession was lawful, but the conversion was dishonest.

Observation:
If the accused originally gains lawful possession of the property, theft is excluded — the subsequent dishonest disposal constitutes criminal breach of trust.

Case 3: State v. Hari Bahadur Basnet (NKP 2061, Decision No. 7632)

Facts:
A servant took his employer’s gold ornaments from the house when he was away.

Issue:
Could this be considered a breach of trust, given his employment relationship?

Judgment:
The Court ruled it was theft, not criminal breach of trust, because:

The servant had no lawful possession of the ornaments.

The property was taken without consent, not misused after being entrusted.

Principle:
Employment relationship alone does not automatically create entrustment. There must be explicit trust over the specific property.

Case 4: Bhim Bahadur Gurung v. Government of Nepal (NKP 2049, Decision No. 5013)

Facts:
An accountant of a cooperative took some members’ deposited funds and used them personally.

Issue:
Was it theft or criminal breach of trust?

Judgment:
The Supreme Court declared it a criminal breach of trust:

The accused had entrusted custody of funds as part of his job.

Misuse of entrusted money is a breach of fiduciary duty.

Legal Principle:
When property (cash, documents, etc.) is handed over to a person for a specific purpose, and that purpose is violated dishonestly, the offence is criminal breach of trust.

Case 5: State v. Dhan Maya Shrestha (NKP 2056, Decision No. 6358)

Facts:
The accused found her friend’s jewelry at her home and secretly sold it without informing her.

Judgment:
Held to be theft, because:

There was no formal entrustment.

She dishonestly took another’s property without permission.

Principle:
Mere opportunity to access property does not create a trust. Entrustment must be intentional and lawful.

Case 6: Rajendra Prasad Pandey v. Government of Nepal (NKP 2072, Vol. 12, Decision No. 9867)

Facts:
A company manager diverted company funds into his personal account under pretext of paying suppliers.

Judgment:
Held to be criminal breach of trust.
The Court clarified that:

“Entrustment” includes professional fiduciary obligations, not just formal handovers.

When someone in authority uses organizational funds for personal benefit, it qualifies as criminal breach of trust.

Principle:
In professional or official capacities, misuse of property under one's charge constitutes breach of trust even without physical transfer of possession.

🔹 3. Key Comparative Judicial Principles

Basis	Theft	Criminal Breach of Trust
Possession at the start	Illegal or unauthorized	Legal/entrusted
Entrustment	Absent	Present
Dishonest intention	At the time of taking	Arises later
Relationship	No trust relation necessary	Requires fiduciary/trust relationship
Example	A steals B’s watch	A, who was given B’s watch to repair, sells it

🔹 4. Summary of Judicial Interpretation

Entrustment and lawful possession are the decisive factors in distinguishing the two offences.

Theft involves unlawful taking from another’s possession.

Criminal breach of trust arises when property, lawfully held, is misused against the purpose of trust.

The Supreme Court of Nepal consistently stresses the mental element (dishonest intention) and the moment it arises as a test of distinction.

🔹 5. Conclusion

In Nepalese jurisprudence, both offences protect property rights, but they differ fundamentally in the nature of possession and fiduciary relationship. The Supreme Court’s consistent line of cases — Krishna Bahadur Karki, Ram Bahadur Thapa, Bhim Bahadur Gurung, Hari Bahadur Basnet, Dhan Maya Shrestha, and Rajendra Prasad Pandey — clarify that: