1

CLASS REPORT
FOR LAW OF CRIMES -II
BA.LL.B (Hons.)-III Semester
Topic-Criminal Misappropriation of Property
Submitted by-
Khushboo
BA0220028
Submitted to-
Naleeni K.
Assistant Professor of Law
Tamil Nadu National Law University, Tiruchirappalli

Date-3 November 2023

INTRODUCTION
The offense of criminal misappropriation of property is defined in Section 403 of the Indian
Penal Code (IPC). According to the provided statement, individuals who engage in the act of
dishonestly misappropriating or converting movable property that has been entrusted to them or
has come into their possession are deemed to be guilty of this particular offense. The
fundamental components of this particular section are:
Dishonesty refers to the deliberate and deceitful act of misappropriation. This implies that the
individual being accused must possess the deliberate purpose to engage in the action in question,
specifically without obtaining the owner's authorization and employing a deceptive aspect.The
property under consideration must possess the characteristic of mobility, indicating its capacity
to be physically carried.The property in question must be either handed to the accused or
acquired by them in some manner.
Section 404 pertains to a particular scenario in which there is fraudulent misappropriation of
property that was owned by an individual who has since passed away.
 2

The primary focus of both sections pertains to the notion of deceitfulness, with the crucial
element of intending to wrongfully acquire property being fundamental in establishing the
offense. These provisions serve to safeguard the property rights of individuals and prevent
individuals who are entrusted with property or acquire it from exploiting their position for
personal benefit through dishonest or deceitful means.
The act of criminal misappropriation of property is considered a primary offense according to the
Indian Penal Code (IPC) and plays a crucial role in safeguarding property rights and deterring
unauthorized conversions or misuse of property. The culpability of those accused of this offense
is significantly influenced by legal principles such as mens rea (the mental state of guilt) and
actus reus (the physical act of guilt). In order to establish culpability, the prosecution is required
to provide evidence that the defendant has the necessary intention to unlawfully usurp the
specific property in question.

Learning Outcomes

● To understand the legal provisions governing the criminal misappropriation of Property

● To identify the fundamental difference between Theft and criminal Misappropriation of
Property
● To learn the aggravated form of criminal misappropriation
Content of PPT
● Definations
● Essentials of Criminal Misappropriation of Property
● Nature of offence
● Punishment for Criminal Misappropriation of Property
● When the finder of goods is guilty of criminal misappropriation of property
● The Aggravated Form of Criminal Misappropriation of Property
● Distinction Between Theft and Criminal Misappropriation
● Relevant Case Laws
● Conclusion
● References
 3

Definition: Section 403 of the Indian Penal code deals with the offense of criminal
misappropriation of property. It provides that whenever a person with malicious intention or
dishonest intention misappropriates or converts any movable property for his own use, he is said
to commit the offense of criminal misappropriation of property.1

Misappropriate refers to the unfair taking of another person’s belongings for one’s own use.
Thus, criminal misappropriation is the dishonest conversion of property for one’s own use.

Essentials of Dishonest Misappropriation of Property: These are the essentials of dishonest

misappropriation of property: There must be a movable property. There should be the presence
of dishonest intention. The person must misappropriate or convert the property to his own use.

Nature of the Offence:The offense underneath Section 403 of the Code is non-cognizable,
bailable, compoundable with the court’s permission, and triable by any magistrate.

Punishment for Criminal Misappropriation of Property

Section 403 of the Indian Penal Code also provides the punishment for dishonest
misappropriation of property. Therefore, the person who commits the offense of dishonest
misappropriation of property will be punished with imprisonment of either description for a term
that may extend to two years or with a fine or with both.

When the finder of goods is guilty of criminal misappropriation of property:

•If the finder of goods misappropriates the property for his own use, even after knowing or
having any means to discover the owner, but does not make any efforts to find the true owner; in
such a case, the finder of goods is liable for dishonest misappropriation of property.

When the finder of goods is not guilty of criminal misappropriation of property:

1
Indian Penal Code Act No. 45 of 1860 Sec.403.
 4

•If the finder of goods had put all the reasonable efforts to find the true owner of the goods but
was unable to find or if the owner abandoned the property. In this situation, the finder of goods is
not liable for dishonest misappropriation of property.

The Aggravated Form of Criminal Misappropriation of Property

Section 404 of the Indian Penal Code provides for the aggravated form of dishonest
misappropriation of property possessed by a deceased person at the time of his death.

Section 404 IPC says that whoever commits dishonest misappropriation of such property which
is in possession of a deceased person (the person who is dead) at the time of the person’s death,
such person shall be punished with imprisonment of either description for a term which may
extend to three years and shall also be liable to fine.

2
Section 404 of IPC further provides that if dishonest misappropriation of property is done by the
person who was employed as a servant or clerk of the deceased person, he shall be punished with
imprisonment, which may extend to 7 years and shall also be liable to fine. The reason for more
severe punishment in the case of a clerk or servant is because they have a fiduciary or trust-based
relationship with their employer

Distinction Between Theft and Criminal Misappropriation

Intention:

•Theft: The intention in theft is always dishonest from the beginning of the act.3

•Criminal misappropriation: The initial intention may be innocent and lawful, but dishonest
intention develops subsequently.

Moving of property:

•Theft: The moving of property is itself an offense.

2
Indian Penal Code Act No. 45 of 1860 Sec.404.
3
Indian Penal Code Act No. 45 of 1860 Sec.378.
 5

•Criminal misappropriation: The mere moving of property does not amount to an offense of
criminal misappropriation. It is necessary that the property is dishonestly converted to own use.

Punishment:

•Theft: Punishment is provided under section 379 of IPC. It is punishable with imprisonment of
either description for a term that may extend to three years or with a fine or with both.4

•Criminal misappropriation: Punishment is provided under section 403 of IPC. It is punishable

with imprisonment of either description for a term that may extend to two years or with a fine or
with both.

Relevant Case Laws

Velji Raghavji Patel v State of Maharashtra: The Supreme Court held a partner has undefined
ownership along with the other partners over all the assets of the partnership. If he chose 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.5

R v Sita: the accused found a gold mohar (sovereign) in an open plain, in a village near
Ahmednagar and sold it the next day to a shroff. The sale was on 12 October 1892, and the
accused was convicted of criminal misappropriation on 12 December 1892. The appeal was
heard on 9 March 1893 before the Bombay High Court, and as no one had come forward till that
date to claim the gold mohar, the conviction was set aside.6

Khandu Sonu Dhobi v State of Maharashtra: The accused was in charge of doing rectification
work on some agricultural bunds. The accused made various entries and prepared documents to
show that the rectification work was completed, when in fact the rectification work was not
done. After complaints were made, he completed the work several months later. The Supreme
Court held that the fact that the accused had subsequently used the money for the purpose for

4
Indian Penal Code Act No. 45 of 1860 Sec.379.
5
Velji Raghavji Patel v State of Maharashtra AIR 1965 SC 1433.
6
R v Sita (1893) ILR 18 Bom 212.
 6

which it had been entrusted made no difference as the case fell under section 403 which provides
that even temporary misappropriation would fall within the meaning of section.7

Conclusion

The offense of criminal misappropriation of property is committed when a person dishonestly

uses the movable property of another person without his consent for his own use. using the
property whose owner is not known or other person has not claimed reasonable possession of
such property would not amount to misappropriation.The criminal misappropriation of the
property of the deceased person by any person or his servant or employee is considered a serious
offense and has greater penalties under the Indian penal code.The offense of criminal
misappropriation is different from theft because later is committed just after dishonestly moving
the moveable property of another person from their possession but criminal misappropriation of
property is committed not from the point where it is dishonestly moved but from the point when
it is appropriate or use for own use by such person committing the offence.

References

•Indian Penal Code Act No. 45 of 1860 Sec.403,404.

•Velji Raghavji Patel v State of Maharashtra AIR 1965 SC 1433

•R v Sita (1893) ILR 18 Bom 212.

•Khandu Sonu Dhobi v State of Maharashtra AIR 1972 SC 958.

•PSA Pillai: Criminal Law,12th Edition,2020.

•Bharti TV, Criminal Misappropriation of Property, Law Time Journal,2020.

7
Khandu Sonu Dhobi v State of Maharashtra AIR 1972 SC 958.
7