Entrustment - Definition - Law Dictionary Home Dictionary Definition entrustment

Definition :

Entrustment, means 'the transfer of possession of goods to a merchant who deals in goods of that type and who may in turn transfer the goods and all rights to them to a purchaser in the ordinary course of business' (Black's Law Dictionary), see also National Insurance Co. Ltd. v. Ishar Das Madan Lal, (2007) 4 SCC 105.

The expression 'entrustment' carries with it the implication that the person handing over any property or on whose behalf that property is handed over to another, continues to be its owner. Entrustment is not necessarily a term of law. It may have different implications in different contexts. In its most general significance, all its imports is handing over the possession for some purpose which may not imply the conferment of any propriety right therein. The ownership or beneficial interest in the property in respect of which criminal breach of trust is alleged to have been committed, must be in some person other than the accused and the latter must hold it on account of some person or in some way for his benefit, Rashmi Kumar v. Mahesh Kumar Bhada, (1997) 2 SCC 397. (Indian Penal Code, 1860, ss. 405, 406)

The expression 'entrustment' carries with it the implication that the person handing over any property or on whose behalf that property is handed over to another, continues to be its owner. Further the person handing over the property must have confidence in the person taking the property so as to create a fiduciary, relationship between them. A mere transaction of sale cannot amount to an entrustment, State of Gujarat v. Jaswantlal Nathalal, AIR 1965 SC 700 (701). (Indian Penal Code, 1860, ss. 405, 409)

Entrustment, carries with it the implication that the person handing over any property or on whose behalf that property is handed over to another, continues to be its owner. Further, the person handing over the property must have confidence in the person taking the property so as to create a fiduciary relationship between them. A mere transaction of sale cannot amount to an entrustment, State of Gujarat v. Jaswantlal Nathalal, AIR 1968 SC 700: (1968) 2 SCR 408; see also National Insurance Co. Ltd. v. Ishar Das Madan Lal, (2007) 4 SCC 105.