Complete Guide to Iranian Law
Breach of Trust in Iran: Complaints and Defence
Elements of breach of trust, cheques and notes given as security, recovery of the property, penalties and defences
What is breach of trust?
Under Article 674 of the Islamic Penal Code (Discretionary Punishments), breach of trust is committed when movable or immovable property or documents such as cheques and promissory notes are handed over on lease, deposit, pledge, agency or for a task, on condition of return or a specified use, and the holder uses, appropriates, destroys or loses them to the owner’s detriment.
Unlike fraud, the property was handed over voluntarily and without deception. A common example is a cheque or note given as security and then presented or transferred although the condition was never met.
Complaint, penalties and defence
A formal demand for return before filing is advisable, because refusal after a demand is strong evidence of appropriation. The victim can claim return or damages in the criminal case. The offence is compoundable and carries a reduced term of imprisonment since the 2020 reform; complaints must be filed within the statutory period after the victim learns of the offence.
Typical defences are that no trust relationship existed (for example a loan or sale), that no return condition was agreed, or that use stayed within the agreement. Shahin Group organises evidence for complainants and clarifies the civil nature of the relationship for the accused.
