Introduction to the concept ‘ Criminal Misappropriation’.

The author of this blog is Aafreen Manzoor of third year of BA LLB student at  Central University of Kashmir, Ganderbal.

The word “misappropriation” means a dishonest appropriation and use of another’s property for the sole purpose of capitalizing it for one’s own use.[1] Criminal misappropriation takes place when the possession has been innocently come by, but where, by a subsequent change of intention, or the knowledge of new fact with which the party was not previously acquainted, the retaining becomes wrongful and fraudulent.[2] Section 403 and 404, IPC relates to the criminal misappropriation of property. Section 403 defines criminal misappropriation and prescribes the punishment for the offence and section 404 deals with the misappropriation of a deceased person’s property.[3]

Criminal Misappropriation of Property

Dishonest misappropriation of property – Whoever dishonestly misappropriates or converts to his own use any movable property, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both.

                             Illustrations

(a)          A takes property belonging to Z out of Z’s possession in good faith, believing, at the time when he takes it, that the property belongs to himself. A is not guilty of theft; but if A, after discovering his mistake, dishonestly appropriates the property to his own use, he is guilty of an offence under this section.

(b)          A and B, being joint owners of a horse, A takes the horse out of B’s possession, intending to use it. Here, as A has a right to use the horse, he does not dishonestly misappropriate it. But, if A sells the horse and appropriates the whole proceeds to his own use, he is guilty of an offence under this section.[4]

Section 403 defines criminal misappropriation and prescribes the punishment for the offence. The offence is punishable with imprisonment that may extend to 2 years (simple or grevious) with fine or with both.[5] Ingredients – This section requires—

·         Dishonest misappropriation or conversion of property for a person’s own use.

·         Such property must be movable.[6]

Dishonest misappropriation of property possessed by deceased person at the time of his death—Whoever dishonestly misappropriates or converts to his own use, knowing that such property was in the possession of a deceased person at the time of that person’s decease, and has not since been in the possession of any person legally entitled to such possession, shall be punished with imprisonment of either description for a term which may extend to three years, and shall also be liable to fine, and if the offender at the time of such person’s decease was employed by him as a clerk or servant, the imprisonment may extend to seven years.

This section is an aggravated form of Criminal misappropriation and prescribes a punishment of three years of imprisonment (simple or grevious) and fine. In case the accused was an employee or clerk of the deceased, punishment may extend to 7 years of imprisonment. This section is intended to punish strangers and servants who can have possibly no right or interest in the effects of a dead man.[7] This section is enacted to provide protection to a special kind of property. It protects the property during an interval which elapses between the time when possessor of the property dies and the time when it comes into the possession of some person or officer authorised to take charge of it. There is some difference of opinion on the point whether the ‘property’ referred to in this section means both movable and immovable property or only movable one. The Bombay and Madhya Pradesh High Courts one of the view that property here only means movable property; but Allahbad High Court holds a contrary opinion.[8]

Ingredients – To attract this section the following ingredients must exist—

1.    The property must be movable property;

2.    Such property was in possession of the deceased at the time of his death;

3.    The accused misappropriated it or converted it to his own use;

4.    The accused did so dishonestly.

The offence is non-cognizable, bailable, non-compoundable and triable by a Magistrate of first class.[9]

Judicial Perspective of Criminal Misappropriation.

In Ram Dayal (1886), a girl ‘A’ found a gold necklace and she handed it over to ‘another girl’ C. B, brother of A represented to C that the necklace belonged to a man of his acquaintance, and thus took it in his possession. On inquiry by a police officer a few hours later, B repeated the representation but afterwards gave up the necklace. The representations were proved to be untrue to the knowledge of the accused B. He was, therefore, held guilty of criminal misappropriation.[10]  In Rama Swamy Nadar v/s State, AIR 1958 SC 56, it was held that Section 403 punishes dishonest misappropriation of the property. In order to convict an offender on the charge of dishonest misappropriation of property, the prosecution is to prove

1.    That the property was of the complainant;

2.    That the accused misappropriated the same or converted it to his own use; and

3.    He did so dishonestly.

In U. Dhar v/s State of Jharkhand 2003 CrlJ 1224 (SC), it was held that Secion 403 uses the word ‘dishonestly’ and ‘misappropriate’. These are necessary ingredients of an offence under Section 403.[11] In Bissessur Roy (1869), a servant, who retained in his hand money which he was authorised to collect, and which he did collect, from the debtor of his master, because money was due to him as wages, was held guilty of criminal misappropriation. In Ramakrishna (1888), where the accused, a Government servant, whose duty it was to receive certain money and to pay it into treasury on receipt, admitted that he had retained two sums of money in his possession for several months, but on fearing detection had paid them into treasury, making a false entry at the time in his books with a view to avert suspicion, it was held that he was guilty of this offence.[12] In the case of State of Orissa v/s Bishnu Charan Muduli [1985 CrLJ, 1573], the Supreme Court held that, where the Head Constable who had forcefully taken the articles to his custody from a boatman, who had previously recovered those articles from a dead body of a drowned person, keeps those articles in his possession dishonestly. Then, the officer who was holding the articles of a deceased person dishonestly was held guilty of an offence under Section 404. In Giridhar Dharmadas, (1869) 6BHC (CrC) 33, the Bombay High Court has clarified on the nature of the property and this clarification has been reiterated by other High Court’s in various cases. The Bombay High Court held that the property under Section 404 shall include only movable property and hence in the case where the misappropriated property was the house which was in possession of a deceased person, the accused was not held guilty of an offence under Section 404.[13]

Conclusion :

It can be concluded that the criminal misappropriation of property is an offence which requires dishonest misappropriation or conversion of movable property by the accused. It applies to the conversion of the property where the offender gets possession of the property by any casualty or anyhow where property must be movable and he apparently misappropriated it.

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References :

      Books :

·         K.D. Gaur, Textbook on The Indian Penal Code, ( first published 1992, 4rth edition, Universal Law Publishing Co. Pvt. Ltd.)

·           Ratanlal and Dhirajlal, The Indian Penal Code,  ( first published 1896, 33rd edition, Lexis Nexis)

·           Prof. Surya Narayan Misra, Indian Penal Code, ( first published 1981,  19th edition, Central Law Publications)

      Statutes :

·         Indian Penal Code, 1860

      Websites and Blogs :

·           Mayank Shekhar,’ Criminal Misappropriation and Criminal Breach of Trust’, (3 February 2018), https://www.legalbites.in/law-notes-ipc-criminal-misappropriation-and-criminal-breach-of-trust/ accessed 25  March 2020 at 11:32 am

·           ‘ Criminal Misappropriation of Property’, https://www.advocateknoj.com/library/lawareas/criminal/criminal.php?Title=Criminal%20Misappropriation%20of %20property accessed 25 March 2020 at 11: 37 am

·         Bharati TV, ‘Criminal Misappropriation of Property’, (25 March 2020), https://lawtimesjournal.in/criminal-misappropriation-of-property/  accessed 30 Mar. 20 at 09:06 pm.

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[1] Mayank Shekhar,’ Criminal Misappropriation and Criminal Breach of Trust’, (3 February 2018), https://www.legalbites.in/law-notes-ipc-criminal-misappropriation-and-criminal-breach-of-trust/ accessed 25 March 2020 at 11:32 am

[2] ‘Criminal Misappropriation of Property’,  https://www.advocateknoj.com/library/lawareas/criminal/criminal.php?Title=Criminal%20Misappropriation%20of %20property accessed 25 March 2020 at 11: 37 am

[3] Supra note 1

[4] Indian Penal Code 1860, s403

[5] K.D. Gaur, Textbook on The Indian Penal Code, ( first published 1992, 4rth edition, Universal Law Publishing Co. Pvt. Ltd.),p.707

[6] Ratanlal and Dhirajlal, The Indian Penal Code,  ( first published 1896, 33rd edition, Lexis Nexis), p.856

[7] Supra note 6, p.708

[8] Supra note 9, p. 809

[9] Supra note 6, p.709

[10] Supra note 9, p. 806

[11] Indian Penal Code, 1860

[12] Supra note 7, p. 858

[13] Bharati TV, ‘Criminal Misappropriation of Property’, (25 March 2020), https://lawtimesjournal.in/criminal-misappropriation-of-property/  accessed 30 Mar. 20 at 09:06 pm