How do I file a criminal breach of trust case against an employee who stole company funds?

Question

An employee entrusted with company funds has misappropriated a large sum. What is the process for filing a case under BNS s.316? I have been reading conflicting things online and I would like to understand what Indian law actually says about this, which Act and Section applies, what the realistic timelines and costs are, and what I should be doing right now to protect my position. If the matter can be resolved without litigation I would prefer that route, but I want to know what my rights are before I agree to anything or sign any document.

MyVakeel Legal Desk · Accepted Answer

How do I file a criminal breach of trust case against an employee who stole company funds? is governed in India primarily by BNS 2023 s.316, BNSS 2023 s.173 and Companies Act 2013 s.447 (if applicable). The short answer is set out below, followed by the practical steps most people in this situation need to take. Read it alongside the specific provisions named, because the exact relief available to you turns on the facts you can prove on paper.

Criminal breach of trust by an employee/agent falls under BNS s.316(3), punishable with up to 10 years imprisonment and fine, since it involves entrustment in a position of trust such as clerk, agent or employee.

You must establish entrustment (employment contract, authorization to handle funds) and dishonest misappropriation or conversion, usually shown through audit reports, bank statements and internal investigation findings.

This is a cognizable offence, so a detailed written complaint with documentary evidence to the police (usually the Economic Offences Wing in larger cities) can lead to direct FIR registration and arrest.

If the company is a listed or larger entity, fraud provisions under Companies Act s.447 may also apply in parallel, along with disciplinary action and civil recovery.

Preserve the chain of custody of financial records and consider a forensic audit report, since courts give weight to documentary proof over oral allegations in white-collar cases.

What to do next: 1) Conduct an internal audit or forensic review to quantify the misappropriated amount; 2) File a detailed written complaint with supporting documents at the police station or EOW; 3) Simultaneously issue a legal notice and consider a civil suit for recovery of the misappropriated amount; 4) Preserve original records and restrict the employee's access to systems immediately.

If the other side has already issued a notice, filed a case or set a deadline, treat the matter as time-sensitive — most remedies under BNS 2023 s.316 carry limitation periods, and a delay you cannot explain weakens an otherwise strong case. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in this practice area.