SECTION 403

Criminal Misappropriation of Property under IPC

I. INTRODUCTION

Section 403 defines criminal misappropriation of property and prescribes penalty thereof. Before understanding the section the term dishonestly should be understood which has been defined in Section 24 of IPC as – A person is said to do a thing dishonestly if he intentionally causes wrongful gain to one person and wrongful loss to another person.

II. INGREDIENTS

The essential requirements of criminal misappropriation of property as given in the provision are :

1. The property must belong to a person other than the accused;
2. The accused must have misappropriated the property or converted it to his own use; and
3. There must be a dishonest intention on the part of the accused.
4. Such property must be movable.

EXPLANATION 1 – This explanation simply provides that S. 403 includes temporary as well as permanent misappropriation of property.

Illustration – A finds a promissory note belonging to Z. A knowing the same still pledges it with banker as a security for loan but with the intention of restoring it with Z in future. A has committed an offence under this section

EXPLANATION 2 – This explanation provides that if a person finds and takes the property which is not in the possession of any other person for the purpose of :

1. Protecting it; or
2. Restoring it to the owner and
3. Does not take or misappropriate it dishonestly

is not guilty of an offence under this section. However, it further provides that he will be guilty of the offence if he appropriates to his own use:

1. When he has the means of discovering the owner or
2. Before using some reasonable means to discover the owner and give notice to the owner and has kept the property for a reasonable time to enable the owner to claim it.

What are reasonable means or time is question of fact. It is not necessary that the finder should know who the owner of goods is, it is sufficient if at the time of appropriating he does not believe it to be his own property.

Illustration : A finds a valuable ring not knowing to whom it belongs. He sells it immediately without attempting to discover the owner. A is guilty of offence under this section.

Illustration : A finds a rupee on the road not knowing to whom it belongs. He picks up the rupee. Here A has not yet committed any offence under this section.

III. EXPLANATION OF ESSENTIALS

1. Dishonestly misappropriates or converts to his own use – Dishonesty & Misappropriation must co-exist. For a person to be dishonest he must have misappropriated the property with the intention of causing gain by unlawful means of property to a person who is not legally entitled to it, and on the other side causing loss by unlawful means of property to the person who is legally entitled to it. Where there is no intention to cause such gain or loss of property and it is merely an intention to deprive the owner temporarily of the use of property, in such cases, dishonesty is not made out. In A. Ebrahim v. NAA Ganny, it was held that the offence under this section does not depend on the consequence but only on the act which has been done.
2. Dishonestly Misappropriates – A person is said to misappropriate if he sets apart or assigns a particular thing to a wrong person or for a wrong use; and this act must be done dishonestly. Also if he uses it in a manner different from what he was bound to use then he is said to have misappropriated the property.
3. Converts to his own use – Converts means that the person appropriates and deals with the property of another as if it is one’s own property, without having the right to use it. The essence of the offence is that some property belonging to another person which comes into the possession of the accused innocently, is misappropriated or converted by the accused to his own use. There must be actual conversion. In Phuman’s case, it was held that if an accused found a purse and put it in his pocket but was immediately arrested, then he cannot be held guilty of criminal misappropriation of property as it cannot be assumed that by the mere act of putting it in his pocket he intended to appropriate to its contents to its own use.
4. Any movable Property – Only movable property can be the subject matter of an offence under this section. There cannot be criminal misappropriation of immovable property. Movable property has been defined in S. 22 of IPC.

IV. RELATED CONCEPTS VIS-A-VIS S. 403

1. Position in English Law :- In English law only the intention of the accused at the time of taking the property of another person into possession is taken into account, and if it was innocent intention though later it became dishonest, still it is considered as civil wrong, whereas in Indian law if a change of intention occurs, that is, from honest to dishonest, the offence of criminal misappropriation of property is committed.
2. Temple Property :- In Gadgayya v. P. Siddeshvar, it was held that the property of temple is to be used for the purposes of temple and if it used for any other unrelated purpose it will be a malversation of that property, and if dishonest, will amount to CM.
3. Harvesting crops under attachment – In Obayya case, It has been held that where a judgement debtor whose standing crops were attached had harvested them while under attachment was in force, will be guilty of CM.
4. Procedure – It is a non-cognizable, bailable offence triable by Magistrate. It is compoundable by the owner of the property misappropriated.
5. Punishment – An accused who is convicted under this section may be punished with imprisonment which may extend to 2 years or with fine or with both.
6. Difference b/w Theft & Criminal Misappropriation :-

SECTION 404

I. SCOPE & PUNISHMENT

This section provides that whoever dishonestly misappropriates or converts to his own use property despite of knowing the fact that such property was in the possession of the deceased person at the time when that person died and has not come into possession of any person entitled to such possession, shall be liable to

1. Punishment = Which may extend to 3 years and fine &
2. Punishment (When offender is a person who at the time when person died was the clerk or servant) = Which may extend to 7 years and fine

Illustration – Z dies in possession of money. His servant A, before the money comes into possession of any person entitled to it dishonestly misappropriates it. A has committed an offence under this section.

II. DISHONESTLY MISAPPROPRIATES

Dishonest – Section 24 IPC Meaning

Held : It was held that removing ornaments from a dead body did not amount to taking ornaments out of the possession of a person as a dead body is not a ‘person’ and such an act would amount to dishonest misappropriation of property possessed by the deceased and the accused would be liable under this section.

III. PROPERTY

There is difference of opinion as to whether the property referred to in this section means both movable and immovable property or only movable one. The Bombay & MP High Courts are of the view that property here means only movable whereas Allahabad HC holds a contrary opinion.