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criminal misappropriation -403

Section 403-

Section 403 provides that an offence of criminal misappropriation of property is said to be constituted if any person dishonestly misappropriates or converts the movable property of another for his own use. Therefore, the essentials of criminal misappropriation of property according to section 403 are-

1. Dishonest misappropriations or conversion of property of another for his own use by the accused

2. The property so misappropriated or converted shall be movable in nature.


To Misappropriate literally means to set apart from ones own use unlawfully or improperly setting apart for ones own use to the exclusion of the owner. Converts means appropriating or dealing with someones property as it were his own . 403 further requires that a movable property must be dishonestly appropriated by the accused person . Mere misappropriation and conversion is not enough , its essential that dishonest intention must be present.


Where the accused found a purse on the pavement of temple in a crowded gathering and he put the purse in his pocket but was immediately arrested, it was held that accused was not guilty of 403 , as it could not be assumed that by mere act of picking up a purse and putting it in his pocket he intends to to appropriate the contents to his own use. ( Phuman , (1907) PR No. 11 of 1908)


However, this section is no way restricted to appropriating property to ones own use. If a trustee repudiate the trust and asserts that he holds the property on behalf of a person , other than the one who entrusted him with it , he has misappropriated the property just as much as he would have been said to misappropriate if it had been putting forward his own claims to it. (Indar Singh (1925) 48 All 288)




TEMPLE PROPERTY :

Property of an idol or a temple must be used for the purpose s of that idol or temple any other use would be malversation of that property and if its dishonest , it would amount to criminal misappropriation . ( Gadgayya v. Guru Siddeshwar , (1897) Unrep Cr C 919)


Where money is paid to a person by mistake and such person either at the time of receipt or at any time afterwards , discovers the mistake and determines to appropriate the money , that person is guilty under section 403 . ( Shamsoondur, (1870) 2 NWP 475)


In the case of Ramaswami Nadar v. State of Madras[iii], the Supreme Court held that the words used in section 403 such as ‘converts to his own use’ necessarily connotes that the accused has used or dealt with the property in derogation of the rights of the owner of the property.




Section 404-

Section 404 provides for criminal misappropriation of property is a specified case, that is in case of the property which was possessed by a deceased person at the time of his death. This section prescribes the following essentials-


1. Dishonest misappropriation or conversion of property


2. The property must have been in the possession of a deceased person at the time of his death


3. After the death of the person in possession of the property, the person who is legally entitled to take the possession of the property has not been given with the possession


The section can be further divided into two parts (which are accused's position centric) -


1. Cases where the offence under section 404 is committed by any person

2. Cases where the offence under section 404 is committed by a person who was employed as a clerk or a servant under the person deceased having the property in possession.



Where the accused secreted lettters with intention of handling them over to delivery peon and shring with him certain money's payble upon them , it was held that he was liable for 403 . (Venkatasmi , (1890)14 Mad 229)


Retention most not be permanent :-

The accused a government servant used to receive certain money to be deposited in the treasury. On an occasion he retained two sums of money , and after 7 months fearing detection , he returned the sum . He was held liable for section 403.

(This position would also apply if servant is authorized to collect and manage money on behalf of master , and he misappropriates it dishonestly. (vide : Bissessur Roy (1869( 11 WR Cr 51)




Property must be owned by someone :


A bull set at large in accordance with Hindu religious rites is res nullis and hence , it cannot be misappropriated but a bull belonging to idol can be misappropriated.


Allahabad High Court

Ram Bharosey vs State on 4 January, 1952

When a stray animal is found and is taken into possession by the finder thereof, he may, in the first instance, do it with no criminal intent. Thereafter, if he changes his intention with regard to the animal and converts the animal to his own use, he then commits an offence under Section 403, Penal Code. A finder of an article should take some steps in order to ascertain who the true owrer is. If, after he has taken such steps, the true owner is not discovered, then, under certain circumstances the finder may retain the article and in such a case he would not be held guilty of criminal misappropriation, but if he acts with reference to the article found in such a way that the true owner may never discover that it had been picked up by him, then undoubtedly he is attempting to create a situation where conversion of the goods to his own use would be easy. In such a case naturally the conduct of the finder is criminal conduct and he would come within the ambit of Section 403, Penal Code. The Indian Penal Code protects proprietary rights of an owner. If an owner is deprived of his property without his consent, one of several offences may be committed. The true owner may lose the property by theft or by extortion or by robbery or by criminal misappropriation or criminal breach of trust. Whosoever deprives the true owner of his property by these means will be guilty of one or the other of the offences enumerated above. If the true owner has been deprived of his property by criminal misappropriation and it is in the possession and custody of the person who has so deprived him, then it is not stolen property in the hands of such person but if such person passes the property on to another then the person to whom the property is passed becomes a receiver of stolen property. In other words, for the purpose of the offence of receiving stolen property, property which is stolen or property which is taken by extortion or by robbery or by criminal misappropriation or criminal breach of trust is placed on the same footing by virtue of Section 410. Penal Code.



Supreme Court of India

Sathi Prasad vs State Of Uttar Pradesh on 15 March, 1972


Head constable took away by force watch ornaments etc from boatman , who had recovered these objects from dead body of drowned persons. Constable rather taken making an official entry of these ornaments , took them home for his own purpose. He was held liable for offences under Section 394 , 404 and 218 of IPC



Supreme Court of India

Krishan Kumar vs The Union Of India on 21 May, 1959

Wrongful gain includes wrongful retention and wrongful loss includes being kept out of the property as well as being wrongfully deprived of property. Therefore when a particular thing has gone into the hands of a servant he will be guilty of misappropriating the thing in all circumstances which show a malicious intent to deprive the master of it.



DISTINCTION BETWEEN THEFT AND CRIMINAL MISAPPROPRIATION :-


Offence of theft is defined under section 378 of Indian Penal Code, 1860.Offence of Criminal Misappropriation is defined under section 403 of Indian Penal Code, 1860.


In Theft, the initial taking of the property is always unlawful. The intention behind such act is always dishonest.In Criminal Misappropriation, the initial step of taking property may be innocent and lawful. Dishonest intention develops subsequently.


In theft, property is moved without the consent or knowledge of the owner.In Criminal Misappropriation, the owner might have come into possession of the property with the express consent of the owner or by some casualty.


In theft, the moving of property is itself an offence. In Criminal Misappropriation, the offence is said to be committed when the property is converted or misappropriated with dishonest intention for offender’s own use. Mere moving of property not constitute the offence.


In theft, the right of the possession is violated by the wrongdoer. In Criminal Misappropriation, the there is no such infringement of right of possession as the offender is already in the possession of the property.



Offence of theft is punishable with imprisonment of either description for a term which may extent to 3 years or with fine,or with both (Sec.379,IPC).Offence of Criminal Misappropriation is punishable with imprisonment of either description for a term which may extent to 2 years or with fine, or with both (Sec.403,IPC)





Supreme Court of India

Velji Raghavji Patel vs State Of Maharashtra on 11 December, 1964

It is obvious that an owner of property, in whichever way he uses his property and with whatever intention will not be liable for misappropriaion and that would be so even if he is not the exclusive owner thereof. A partner has, undefined ownership along with the other partners over all the assets of the, partnership. If he chooses to use any of them for his own purposes he may be accountable civilly to the other partners. But he does not thereby commit any misappropriation




In K. C. Mukherjee v. B. N. Banerji - AIR 1954 Cal 547 the receipt of compensation money by the accused therein, in respect of the lands mortgaged by him to one Banerji (mortgagee) with whom he had entered into an agreement that the compensation money would first be applied towards satisfaction of the mortgage loan, and keeping the same for his own utility and refusing to pay to the mortgagee, was not held to amount to criminal misappropriation within the meaning of Section 403 of the Indian Penal Code. The contention advanced on behalf of the mortgagee that retaining the money by the mortgagor for himself amounts to misappropriating the money dishonestly was not acceded to. It is not the form but the reality of the fact underneath the form that should be looked into and so judged the Court was of the view that the compensation to carry out the terms of his contract would amount to misappropriating the money dishonestly, observed thus: The refusal to pay every civil debt does not justify the finding of dishonesty


Supreme Court of India

U. Dhar & Anr vs The State Of Jharkhand & Anr on 20 January, 2003

accused Main contractor received payments but did not paid sub contractor - sub contractor filed a complaint for for criminal misappropriation . Apex Court held that money paid to contract was not property of sub contractor , hence its not a case falling under 403 .



CONVICTION IN 404 WHEN CHARGE WAS OF 406 :


In State of Himachal Pradesh v. Tara Dutt and another, reported in 2000 Cri. L.J. 485, the Apex Court has held that where this is a charge for major offence, the accused can be convicted for minor offence if facts established indicate that such minor offence has been committed.


Rajendra Singh and another v. State of Uttar Pradesh AIR 1960 All 387, , wherein the accused were charged and convicted under section 406 I.P.C., but it was found that facts proved did not disclose offence under section 406, but proved facts disclosing offence under section 403 which was minor offence, hence the conviction was altered from section 406 I.P.C. to 403 I.P.C.



031. Criminal misappropriation -403
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