INTRODUCTION

Section – 403 of the Indian penal code reads that, whoever dishonestly misappropriates any movable
property to his own usage, shall be punished with imprisonment up to 2 years or with fine or both.
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.

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.
Some of the illustrations are as follows:

1. Suraj takes property belonging to Ajay out of Ajay’s possession, in good faith, believing, at
any time when he takes it, that the property belongs to himself. Ajay is not guilty of theft.
But if Suraj, after discovering his mistake, dishonestly appropriates the property to his own
use, he is guilty of an offence under this section.
2. Kirat, being on friendly terms with Zeeshan, goes into Zeeshan’s library in his absence, and
takes away a book without his expressed consent. Here, if Kirat was underneath the
impression that she had Zeeshan’s implicit consent to take hold of the book for the aim of
reading it, she has not committed theft. But, if she subsequently sells the book for her own
profit, she is guilty of an offence under this section.
3. 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.

INGREDIENTS OF SECTION 403

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, 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

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 wilfully 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

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 vs. The State of Uttar Pradesh, 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, 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, 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.

DIFFERENCE BETWEEN MISAPPROPRIATION AND CRIMINAL BREACH

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.