1) Introduction : 

         Section 403 and Section 404 of the Indian Penal Code, 1860 deals with Criminal Misappropriation of Property. Section 403 of the Indian Penal code defines criminal misappropriation and prescribes the punishment for the offence. Section 404 of the Indian Penal Code deals with dishonest misappropriation of a deceased persons property. (See.. Difference between Criminal Misappropriation and Criminal breach of Trust.)

2) Meaning of Misappropriation of Property : 

         The word misappropriation means a dishonest appropriation, and use of another's property for ones own use.

3) Dishonest misappropriation of property :

         Section 403 of the Indian Penal Code 1860 says that, 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, being on friendly terms with Z, goes into Z's library in Z's absence and takes away a book without Z's express consent. Here, if A was under the impression that he had Z's implied consent to take the book for the purpose of reading it, A has not committed theft. But, if A afterwards sells the book for his own benefit, he is guilty of an offence under this section.

           (c) 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.

Explanation 1. -

            A dishonest misappropriation for a time only is a misappropriation with the meaning of this section.



Illustration :

            A finds a Government promissory note belonging to Z, bearing a blank endorsement. A, knowing that the note belongs to Z, pledges it with a banker as a security or a loan, intending at a future time to restore it to Z. A has committed an offence under this section.

Explanation 2. -

             A person who finds property not in the possession of any other person, and such property for the purpose of protecting it for, or of restoring it to, the owner, does not take or misappropriate it dishonestly, and is not guilty of an offence; but he is guilty of the offence above defined, if he appropriates it to his own use, when he knows or has the means of discovering the owner, or before he has used reasonable means to discover and give notice to the owner and has kept the property a reasonable time to enable the owner to claim it.

             What are reasonable means or what is a reasonable time in such a case, is a question of fact. It is not necessary that the finder should know who is the owner of the property, or that any particular person is the owner of it: it is sufficient if, at the time of appropriating it, he does not believe it to be his own property, or in good faith believe that the real owner cannot be found.

Illustrations

(a) A finds a rupee on the high-road, not knowing to whom the rupee belong, A picks up the rupee. Here A has not committed the offence defined in this section.

(b) A finds a letter on the road, containing a bank note. From the direction and contents of the letter he learns to whom the note belongs. He appropriates the note. He is guilty of an offence under this section.

(c) A finds a cheque payable to bearer. He can form no conjecture as to the person who has lost the cheque. But the name of the person, who has drawn the cheque, appears. A knows that this person can direct him to the person in whose favour the cheque was drawn. A appropriates the cheque without attempting to discover the owner. He is guilty of an offence under this section.

(d) A sees Z drop his purse with money in it. A pick up the purse with the intention of restoring it to Z, bu afterwards appropriates it to his own use. A has committed an offence under this section.

(e) A finds a purse with money, not knowing to whom it belongs; he afterwards discovers that it belongs to Z, and appropriates it to his own use. A is guilty of an offence under this section.

(f) A finds a valuable ring, not knowing to whom it belongs. A sells it immediately without attempting to discover the owner. A is guilty of an offence under this section.

Ingredients : 

     To constitute the offence of  misappropriation following ingredients must be satisfied:

(i) The accused misappropriated property and converted the same to his own use.

(ii) He dose does so dishonestly.

(iii) The property is movable; and

(iv) the movable property belonged to complainant

       The offence under Section 403 of the Code is non-cognizable, bailable, compoundable with the permission of the court and triable by any Magistrate.



4) Dishonest misappropriation of property possessed by deceased person at the time of his death :

              Section 404 of the Indian Penal Code says that, 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.

Illustration 

Z dies in possession of furniture and money. His servant A, before the money comes into the possession of any person entitled to such possession, dishonestly misappropriates it. A has committed the offence defined in this section.

        Section 404 of the code is an aggravated form of Criminal Misappropriation and prescribes a punishment of three years of imprisonment which may simple or rigorous and fine.

Ingredients :

To invoke Section 404 of the Indian Penal Code following ingredients are to be satisfied.

(i) The property must be movable property

(ii) Such property was in possession of the deceased at the time of his death ;

(iii) The accused misappropriated it or converted it to his own use; and

(iv)  The accused did so dishonestly.


Offence under this Section is non-cognizable, bailable, non-compoundable, and triable by Magistrate of the First class.


See also

1) Offences Relating to Religion (Section 295 to Section 298 of the Indian Penal Code 1860)

2) Offences Relating to Weights and Measures (Indian Penal Code,1860)

3) Distinction / Difference between Criminal Misappropriation and Criminal breach of Trust

4) Dowry Death (Section 304-B, Indian Penal Code, 1860)

5) Offences Relating to Elections : Indian Penal Code 1860

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