Criminal Misappropriation of Property

The term “Misappropriation” means a fraudulent use or appropriation of someone’s else property for the sole motive of capitalizing it for one’s own use. Also, criminal misappropriation takes place when the property has come innocently, but because of the subsequent change of purpose or after knowledge of some new facets with which the said party was not previously acquainted. Therefore, retaining a property becomes fraudulent and wrongful when the facts are known.

Section 403 of the Indian Penal Code deals explicitly with the Dishonest Misappropriation of Property. Whereas section 404 relates to the Dishonest Misappropriation of Property possessed by the deceased at the time of his death.

Further, section 403 does not define the term Criminal Misappropriation of Property but describes what is “Dishonest Misappropriation of Property” in section 403 of the Indian Penal Code. Furthermore, the offence of Misappropriation of Property is derived out the offense of theft. Also, the term Misappropriation means the act of possessing the property of another person and using it without the authorization of the rightful owner.

For example, A finds a letter on the road, including a banknote. From the contents and directions are written on the letter, he learns to whom the said note belongs. However, he appropriates the bill for his use. He is guilty of the offence of misappropriation of property under this section. But, if he would have tried to search for the rightful owner to return it, then he would have been considered innocent.

Lastly, both the permanent and temporary misappropriation of property are punishable under the law.

Essentials of Criminal Misappropriation of Property

The Essentials of the offence of Criminal Misappropriation of Property are as follows:

• The property in dispute must belong to the complainant or victim;
• The property in question must be any movable property;
• That property must be misappropriated or converted by the accused to his use;
• That use must be dishonest.

Things to Consider for Criminal Misappropriation of Property

According to the criminal law, the property referred in section 403 must belong to the complainant.  However, the said property must be in possession of the accused possession, as the offence of misappropriation is complete when the property in dispute is in someone’s possession. Hence, the crime of Criminal Misappropriation of Property is not complete when no possess the property in question.

Further, the first thing to prove is that the complainant rightfully owns the property in question. And the second thing to prove is that the accused person has the possession of that property. Lastly, the property in question must be any movable property.

The Hon’ble Supreme Court in the case, “Velji Raghavji Patel v. State of Maharashtra” (AIR 1965 SC 1433) held that a court does not have the authority to direct an individual on how to spend their own money. Also, in the case of a partnership, if one partner utilises a firm’s assets, he will be accountable to other partners and will also bear the burden. But the accused person cannot be convicted under section 403 of the Indian Penal Code for the same.

Also, in the case of “Ramaswamy Nadar v. State of Madras” (AIR 1958 SC 56), the Trial Court ruled against the accused that the amount received from the audience and participant must have been used for awarding the winner rather than paying it to his debtors. However, the Hon’ble Supreme Court overruled it by saying that the trial court should have directed the accused as to how to use his money. Further, the amount received was rightfully owned by him. Hence, the accused was acquitted by the court.

Dishonest Misappropriation of Property possessed by a Deceased

Section 404 of the IPC states that, whoever dishonestly converts or misappropriates to his use any property, knowing that such a property was being possessed by the deceased person at the time of his death, and since then has not been in the custody of any individual legally entitled to such possession, will be punished with imprisonment for a term which can reach up to three years, and will also be liable to pay a fine, and if in case the offender has served as a servant or clerk, the imprisonment may reach to seven years.

Essentials of a Dishonest Misappropriation of Property possessed by a Deceased

The essentials required for invoking section 404 of the Indian penal code are as follows:

• The property in question must be any movable property;
• Such property was in possession of the deceased person at the time of his death;
• The defendant had either converted or misappropriated to his own use;
• The accused did so with a dishonest intention;
• The offence mentioned under this section is non-cognizable, non-compoundable, bailable, and triable by a magistrate of the first class.

Punishment Prescribed for the Criminal Misappropriation of Property

Section 403: The accused shall be liable for the imprisonment up to two years or with a fine or with both.

Section 404: The accused shall be liable with the imprisonment up to three years or with a fine or both. However, if the accused is either the servant, clerk or any person employed by the deceased person, he shall be liable with the imprisonment up to three years.

How will Lawyerinc assist you?

• Free consultation over the phone;
• Right guidance on the matter;
• Expert lawyer as per the jurisdiction shall be provided;
• Filing of the Petition under Criminal Laws;
• Hassle-free service;
• We will inform you about day-to-day proceedings in the said matter.