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This article is written by Vividh Jain, a student of the Institute of Law, NIRMA University. In this article, the author differentiates between Criminal Misappropriation and Criminal Trust.

Introduction

The offences like Criminal Misappropriation and Criminal Breach of Trust are criminal offenses against property as mentioned under the Indian Penal Code, 1860. Section 403 of the Indian Penal Code, 1860 defines Misappropriation of the property whereas Section 405 of the Indian Penal Code, 1860 defines Criminal Breach of Trust. Under Section 403 of the Indian Penal Code, when a person dishonestly misappropriated or uses the property of another person to satisfy his own purpose or to capitalize it for one’s own use, has committed the offense of criminal misappropriation. The essential ingredient of Section 405 of the Indian Penal Code, 1860 is trust and whoever breaches it, has committed the offense of Criminal Breach of Trust

Dishonest Misappropriation of Property

Section 403 and Section 404 of the Indian Penal Code, 1860 deals with the provision related to criminal misappropriation of property. Section 403 of the Indian Penal Code talks about the Dishonest misappropriation and the prescribed punishment under this offense while Section 404 of the Indian Penal Code deals with the provision related to criminal misappropriation of a deceased person’s property. 

Under Section 403 of the Indian Penal Code, when a person dishonestly misappropriated or uses the property of another person to satisfy his own purpose or to capitalize it for one’s own use, has committed the offense of criminal misappropriation, shall be punished with imprisonment for not less than a term that may extend to 2 years or with fine or maybe with both, provided that the property is movable in nature. 

Essential Ingredients of Section 403 of IPC

To make a person liable for an offence of Criminal Misappropriation, the following essential ingredients must be fulfilled:

  • The property must be of another person: The property must be of another person, meaning to say, the owner of the property should not come under the definition of ‘another person’. The property must belong to its owner and dishonestly misappropriated by another person to satisfy his own purpose. 

For example, Ram took a red car belonging to Shyam by mistake or unknowingly but returns the same when he found that the real owner of the car is Shyam, then there is no misappropriation of the property but if Ram does not return the car even after knowing that the car belonged to Shyam, then Ram committed the offense of misappropriation of property. 

    • Dishonest Intention: When any person misappropriated or converts any property of another person with dishonest intention, has committed the offence of criminal misappropriation. The offender must possess dishonest intention while committing the crime. 
    • Conversion of the property: For constituting an offence of criminal misappropriation the essence behind this section is when a person converts any property for his own use. A word ‘converts to his own use’ connotes the usage or deals with the property in derogation of the right of the owner, as per Ramaswami Nadar vs The State of Madras (1957).
  • Finder of the goods: When a person found something belonging to another person and he took all the necessary steps to find the real owner of the goods and kept the found good for a reasonable time to return it to the true owner of the property, even after this, if he is unable to found the true owner of that goods, the finder of the goods can use the goods for his own purpose. But, if he keeps the goods to himself since the true owner is unknown and not took reasonable steps to identify the real owner or if he immediately misappropriates the property without waiting for sufficient time, he has committed the offence of Criminal Misappropriation and would be liable under Section 403 of the India Penal Code, 1860. 

In the case of U. Dhar vs The State of Jharkhand (2003), the Supreme Court of India held that any dispute related to the recovery of money is always of civil nature and criminal complaint in this regard is not maintainable. 

Misappropriation of a deceased person’s property

Section 404 of the Indian Penal Code, 1860 is an aggravated form of criminal misappropriation. Under Section 404 of the Indian Penal Code, when a person dishonestly misappropriated or uses the property belonging to a deceased person to satisfy his own purpose or to capitalise it for one’s own use, has committed the offence of criminal misappropriation, shall be punished with imprisonment for not less than a term that may extend to 3 years or with fine or maybe with both. If at the time of the person’s death, it was found that the offender was employed by the deceased person as a servant or clerk, the punishment may extend to seven years. This Section is intended to protect the property of a deceased person which needs special protection under these conditions or these circumstances. This Section aims to punish servants, strangers or other domestic workers who have no rights or interests in the effects of the dead man.

Essential Ingredients of Section 404 of IPC

To make a person liable for an offence mentioned Under Section 404 of the Indian Penal Code, 1860, the following essential ingredients must be fulfilled:

  • The property must be movable in nature or must be a movable property;
  • Such property must be in the possession of the deceased person at the time of the death of such person;
  • The offender converted it or misappropriated it for his own use;
  • The accused must have dishonest intention while committing such a crime. 

Criminal Breach of Trust

Under Section 405 of the Indian Penal Code, 1860, when a person is entrusted with the property or that person has power or dominion over that property, dishonestly misappropriated or uses that property to satisfy his own purpose or to capitalise it for one’s own use, or disposes of that property is contrary to a law that prescribes how to discharge such trust or in violation of any contract, express or implied, or willfully directed any person to do so, has committed the offence of Criminal Breach of Trust. Under Section 406 of the Indian Penal Code, any person commits an offence of Criminal Breach of Trust, shall be punished with imprisonment for not less than a term that may extend to 2 years or with fine or maybe with both. 

Essential Ingredients of Section 405 of IPC

To make a person liable for an offence of Criminal Breach of Trust, the following essential ingredients must be fulfilled:

    • Entrustment: As per the case of Surendra Pal Singh Vs. The State of Uttar Pradesh (2017), entrustment means handling over the property or giving them control over the property from one person to another so that the person on whose behalf the property is transferred remains the owner of that property. To constitute an offence of criminal breach of trust, the essence of word entrustment is a must. The interpretation of this Section is very wide as it takes servants, clerks, business partners, or any other person who is capable of holding a position of trust, under its ambit. 
    • Such entrustment of the property must be in trust: In case of Ramaswami Nadar vs The State of Madras (1957), the apex court held that to constitute an offence of Criminal Breach of Trust or to make any person liable under Section 405 of the Indian penal Code, 1860, the essence of word entrustment is a must. There must be an entrustment of property. The defendant must go through with the trust and possess the property with an authority. 
    • Dominion over the property: The domain is the superior or the fullest right over goods or property. The domain includes the right over goods or property as well as the possession of the property and also includes the right to use that property. It is a type of absolute and complete ownership over the property, but in certain circumstances, the government may seize the property with or without any permission. 
  • Dishonest Misappropriation: To make a person liable for an offense of Criminal Breach of Trust, the essence of dishonest misappropriation as an essential ingredient is a must. Section 24 of the Indian Penal Code, 1860 defines ‘dishonesty’ as generating wrongful loss or wrongful gain to a person. Misappropriate means using the property of another person to satisfy one’s own greed. Hence, dishonest misappropriation is a crucial fact that has to be proved to make a person liable for an offense of Criminal Breach of Trust.

In the case of Mohammed Sulaiman vs Mohammed Ayub and Ors. (1964), the Supreme Court of India held that Section 405 of the Indian Penal Code requires doing something wrong to the property in form of, dishonestly misappropriating or using the property to satisfy his own purpose or to capitalize it for one’s own use, or dispose of that property is contrary to a law that prescribes how to discharge such trust or in violation of any contract, express or implied. The apex court also held that a mere dispute which is of civil nature does not attract the provisions of this section. 

Section 407, 408 and 409 of IPC 

Section 407, 408, and 409 of the Indian Penal Code, 1860 are the aggravated form of Criminal Breach of Trust. Section 407 of the Indian Penal Code, 1860 deals with Criminal Breach of trust by carrier, etc. When any person is entrusted with the property as a carrier, warehouse keeper, or wharfinger, commits a criminal breach of trust regarding that property, shall be punished with imprisonment for not less than a term that may extend to 7 years or with fine or maybe with both.

Section 408 of the Indian Penal Code, 1860 deals with Criminal Breach of trust by clerks and servants. When any person is entrusted with the property as a clerk or a servant, or that person having power or dominion over that property, commits a criminal breach of trust regarding that property, shall be punished with imprisonment for not less than a term that may extend to 7 years or with fine or maybe with both. 

Section 409 of the Indian Penal Code, 1860 deals with Criminal Breach of trust by public servants, or by a merchant, banker, or agent. When any person is entrusted with the property as a public servant, or by a merchant, banker or agent, or that person having power or dominion over that property, commits a criminal breach of trust regarding that property, shall be punished with imprisonment for not less than a term that may extend to 10 years or with fine or maybe with both

The major difference between Criminal Misappropriation and Criminal Trust

On the basis of:

    • Provision: Section 403 of the Indian Penal Code, 1860 defines Misappropriation of the property whereas Section 405 of the Indian Penal Code, 1860 defines Criminal Breach of Trust.
    • Possession: In Criminal Misappropriation, the property comes into the possession of the offender in some natural manner or by some casualty, but in Criminal Breach of Trust, the property comes into the possession of the offender due to the entrustment by the owner of the accused. 
    • Relationship: In Criminal Misappropriation, there is no contractual relationship between the offender and owner of the property, but in Criminal Breach of Trust, there is a contractual relationship between the offender and owner regarding the property. 
    • Nature of the property: In Criminal Misappropriation, the subject matter i.e. the property is always movable in nature, but in Criminal Breach of Trust, the property may be movable or immovable in nature. 
  • Misappropriation: In Criminal Misappropriation, the property is dishonestly misappropriated by the offender for his own use, but in Criminal Breach of Trust, the property or goods are misappropriated for his own personal use. 

Conclusion

It is concluded that the Criminal Misappropriation and Criminal Breach of Trust are not the same. Criminal Breach of Trust includes Criminal Misappropriation but the reverse is not always true. Also, there is a huge difference between Criminal Misappropriation and Theft. Section 378 of the Indian Penal Code deals with the provision related to Theft. Under theft, the consent of the real owner of the property is not known to the offender, but in Criminal Misappropriation, initially, the real owner of the property grants consent to the offender. Another one, in theft when the offender got possession of the property, he commits an act of theft, but in Criminal Misappropriation, the offender just denies to give back the property to its real owner. 

References


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