Chapter XVII of the Indian Penal Code deals with the offences against property. Sections 403 and 404 under the said Chapter of the Code are relating to the offences of Criminal Misappropriation of Property. Section 403 specifically deals with dishonest misappropriation of property and section 404 provides for dishonest misappropriation of property possessed by deceased person at the time of his death.
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.
The provision mandates that there shall be misappropriation or conversion of property by the accused, if the accused has merely retained the property in his possession, then it shall not constitute to be an offence under section 403[i].
The Court held that, if a person picked up a purse in a temple in the crowded gathering and put it in his pocket, but he was immediately arrested. Then such an offence of picking up the purse and not misappropriating the property for his own use shall not amount to offence under section 403 of the IPC[ii].
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.
Criminal Misappropriation of property is distinguished from the offence of theft. The offence of theft and criminal misappropriation of property have the aspect of dishonesty in common. But in case of theft mere moving of the property from the possession of owner is sufficient to constitute the offence, whereas, to prove the offence of criminal misappropriation of property the intention of the accused to convert or misappropriate the property so dishonestly taken into possession should also be established.
The provision under section 403 provides for two explanations to it. They are-
This explanation deals with the cases of ‘dishonest misappropriation’ only. The explanation clarifies the scope of the working of the section, as it includes both temporary and permanent misappropriation.
This explanation describes the rights of a founder of goods along with his liabilities in certain cases. The explanation clarifies that the property which is abandoned by the owner and the founder with all reasonable efforts was unable to find the true owner who has used the property for his own use. Then, the founder of the property cannot be held guilty of an offence under section 403. But the founder is held guilty if he had knowledge of the owner of the property or had all means to discover the owner and utilised none of the means to find the owner.
Further, section 403 imposes punishment on the persons who have committed the offence of criminal misappropriation of property. The punishment shall be imprisonment of a term which may extend to two years or fine or both.
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
Further, the section can be divided into two parts-
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.
In the former cases, the punishment prescribed under the section is imprisonment of a term which may extend to 3 years and shall also be liable to fine. In latter cases, the punishment shall be imprisonment which may extend to the term of 7 years along with liability to pay fine.
In the case of State of Orissa v. Bishnu Charan Muduli[iv], the Supreme Court held that, where the Head Constable who had forcefully taken the articles to his custody from a boatman, who had previously recovered those articles from a dead body of a drowned person, keeps those articles in his possession dishonestly. Then, the officer who was holding the articles of a deceased person dishonestly was held guilty of an offence under section 404.
Section 404 does not specify as to the nature of property whether it must be movable or immovable. The Courts have unanimously observed that the section shall apply only in cases of movable property while deciding many cases.
The Bombay High Court has clarified on the nature of the property and this clarification has been reiterated by other High Courts in various cases. The Bombay High Court held that the property under section 404 shall include only movable property and hence in the case where the misappropriated property was the house which was in possession of a deceased person, the accused was not held guilty of an offence under section 404[v].
Keeping in view the above-mentioned provisions of IPC it can be concluded that the criminal misappropriation of property is an offence which requires dishonest misappropriation or conversion of a movable property by the accused.
Frequently Asked Questions:
Is the offence under section 403 compoundable?
The offence under section 403 is compoundable by the owner of the property misappropriated with the permission of the court.
Is the offence under section 404 compoundable?
The offence under section 404 is non-compoundable.
Edited by Sakshi Agarwal
Approved & Published – Sakshi Raje
[i]Abdool, (1868) 10 WR (Cr) 23A.
[ii]Phuman, (1907) PR No. 11 of 1908
[iii] AIR 1958 SC 56
[iv] 1985 Cr LJ 1573(SC)
[v]GiridharDharmadas, (1869) 6 BHC (Cr C) 33.