Theoretical overview
Criminal misappropriation or dishonest Misappropriation of properties is mentioned under section 403 of Indian penal code which define that whoever dishonestly misappropriates or converts to its own use any movable property shall be punished with imprisonment of either description for a term which may extend to 2 years or with fine or with both.
Essentials to attract this section are: –
- property must be of another
- finding of property
- converting the property to your own use
- such act should be done with dishonest intention
To constitute the offence of criminal misappropriation prosecution has to prove that
- the property was of the complement
- the accused misappropriated the same or converted to his own use and
- he did that dishonestly
When property has been innocently acquired but from subsequent intention or knowledge, the retention becomes wrongful and amounts to its criminal misappropriation. The essence of the offence of misappropriation is putting to own use or converting to own use another’s property. There cannot be misappropriation of one’s own property.
If a person appropriates to himself the property of another puts it into own use or unauthorised use and then restores it to the owner, it will still amount to misappropriation under this section.
Criminal breach of trust is defined under section 405 of Indian penal code which states that whoever being in any manner entrusted with property or any dominion over property dishonestly misappropriates or converts to his own use the property or dishonestly uses or dispose of that property in violation of any direction of law prescribing the mode in which such entrustment is to be discharge or of any legal contract express or implied which he has made touching the discharge of such trust or willfully suffers any other person so to do commit criminal breach of trust.
The essentials for the same are
- the accused must be entrusted with property or dominion over it
- he must have dishonestly misappropriated the property or converted into his own use or dispose of it in violation of such trust.
The principal ingredients of criminal breach of trust are entrustment and dishonest misappropriation
Section 406 of Indian penal code defines punishment for criminal breach as whoever commit breach of trust shall be punished with imprisonment of either description for a term which may extend to 3 years or with fine or with both.
To constituent the offence of criminal breach of trust by a public servant punishable under section 409 Indian penal code, the acquisition of dominion or control over the property must also be in the capacity of the public servant. This is because of the special trust and status which a public servant enjoys in the eyes of the public as a representative of the government or a government owned enterprise.
Relevant sections
Section 403. Dishonest misappropriation of property – Whoever dishonestly mis-appropriates 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
Section 404. Dishonest misappropriation of property possessed by deceased person at the time of his death – Whoever dishonestly misappropriates or converts to his own use property, 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
Section 405. Criminal breach of trust – Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits “criminal breach of trust”.
Section 406. Punishment for criminal breach of trust – Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.
Section 409 Criminal breach of trust by public servant, or by banker, merchant or agent.—Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with 1[imprisonment for life], or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.
Important case laws
Jaswant Rai Manilal Akhaney vs. State of Bombay – it was held that when securities are pledged with a bank for specific purpose on specified conditions, it would amount to entrustment. Similarly, properties entrusted to directors of a company would amount to entrustment, because directors are to some extent in a position of trustee.
Kundanlal vs. State of Maharashtra – wherein the accused to whom the complainant give six gold bangles for repair, pledged the bangles with the bank to raise loan and did not return them to complainant was convicted for criminal breach of trust as he dishonestly misappropriated the property entrusted to him. He was convicted under section 403.
Points to remember
- Criminal misappropriation or dishonest Misappropriation of properties is mentioned under section 403 of Indian penal code
- When property has been innocently acquired but from subsequent intention or knowledge, the retention becomes wrongful and amounts to its criminal misappropriation
- If a person appropriates to himself the property of another puts it into own use or unauthorised use and then restores it to the owner, it will still amount to misappropriation under this section
- The principal ingredients of criminal breach of trust are entrustment and dishonest misappropriation
