An employer deducts a certain percentage from the salary of his employees telling that it is their…

Section 405 explanation 1 deems an employer entrusted with employees’ deducted contributions to a provident or family-pension fund established by law. Default in paying those contributions to the fund in violation of that law is deemed dishonest use contrary to a legal direction. This makes criminal breach of trust the specific offence, rather than theft of property initially taken without consent. The statutory fund and payment-default conditions must be established; a late payment outside those conditions cannot simply be assumed to satisfy the deeming rule.

Current law: BNS section 316(1) explanation 1 retains the provident-fund deeming rule. The general breach-of-trust punishment in subsection (2) has a five-year maximum instead of IPC section 406’s three years. BNS commenced on 1 July 2024 subject to section 358 savings.