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 would rather settle this without going to court if the law allows it, but I need to know my rights before I sign anything. Please tell me what to do first and what document to keep.

MyVakeel Legal Desk · Accepted Answer

Under Indian law, BNS 2023 s.316 is the starting point for this criminal law question. What follows is the position in substance, together with the steps that usually make the difference in practice.

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 this means for you: 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.

Where the facts are disputed, what usually decides a criminal breach of trust employee matter is the paper trail — dated complaints, acknowledgments and written replies under BNS 2023 s.316. 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 criminal law.