Sections 403 to 409

THE INDIAN PENAL CODE, 1860

CONTENTS

CHAPTER XVII

OF OFFENCES AGAINST PROPERTY

4

OF CRIMINAL MISAPPROPRIATION OF PROPERTY

403. Dishonest
misappropriation of property

404. Dishonest
misappropriation of property possessed by deceased person at the time of his
death

5

OF CRIMINAL BREACH OF TRUST

405. Criminal breach of trust

406. Punishment
for criminal breach of trust

407. Criminal breach of trust by carrier, etc.

408. Criminal breach of trusty by clerk or servant

409. Criminal breach of trust by public servant, or by banker, merchant or agent

CHAPTER XVII

OF OFFENCES AGAINST PROPERTY

4

OF CRIMINAL MISAPPROPRIATION OF PROPERTY

403. Dishonest misappropriation of property. —

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 any 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 term 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 dose not dishonestly misappropriate it. But, if A
sells the horse and appropriates the whole proceeds to his own use, he is guilty of any 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 for 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 takes such property for the purpose of protecting if 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 the appropriates it to his own use, when the 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 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 found.

Illustrations

(a) A find a rupee on the high road, not knowing to whom the rupee belongs, 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 see Z drop his purse with money in it. A picks up the purse with the intention of restoring it to Z, but 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.

404. Dishonest misappropriation of property possessed by deceased person at the time of his death. —

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.

5

OF CRIMINAL BREACH OF TRUST

405. Criminal breach of trust. —

Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which
such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits “criminal breach of trust”.

¹[Explanation ²[1]. —A person, being an employer ³[of an establishment whether exempted under section 17 of the Employees’ Provident funds and Miscellaneous Provisions Act, 1952
(19 of 1952), or not] who deducts the employee’s contribution from the wages payable to the employee for credit to a Provident Fund or Family Pension Fund established by any law for the time being in force, shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to said Fund in violation of the said law, shall be deemed to have dishonestly used the amount of the said
contribution in violation of a direction of law as aforesaid.]

⁴[Explanation
2. —A person, being an employer, who deducts the employees’ contribution from
the wages payable to the employee for credit to the Employees’ State Insurance
Fund held and administered by the Employees’ State Insurance Corporation
established under the Employees’ State Insurance Act, 1948 (34 of 1948), shall
be deemed to have been entrusted with the amount of the contribution so
deducted by him and if he makes default in the payment of such contribution to
the said Fund in violation of the said Act, shall be deemed to have dishonestly
used the amount of the said contribution in violation of a direction of law as
aforesaid.]

Illustrations

(a) A, being executor to the will of a
deceased person, dishonestly disobeys the law which directs him to divide the
effects according to the will, and appropriate them to his own use. A has
committed criminal breach of trust.

(b) A is a warehouse-keeper. Z gong on a
Journey, entrusts his furniture to A, under a contract that it shall be
returned on payment of a stipulated sum for warehouse room. A dishonestly sells
the goods. A has committed criminal breach of trust.

(c) A, residing in Calcutta, is agent for Z,
residing at Delhi. There is an express or implied contract between A and Z,
that all sums remitted by Z to A shall be invested by A, according to Z’s
direction. Z remits a lakh of rupees to A, with directions to A to invest the
same in Company’s paper. A dishonestly disobeys the direction and employs the
money in his own business. A has committed criminal breach of trust.

(d) But if A, in the last illustration, not
dishonestly but in good faith, believing that it will be more for Z’s advantage
to hold shares in the Bank of Bengal, disobeys Z’s directions, and buys shares
in the Bank of Bengal, for Z, instead of buying Company’s paper, here, though Z
should suffer loss, and should be entitled to bring a civil action against A,
on account of that loss, yet A, not having acted dishonestly, has not committed
criminal breach of trust.

(e) A, a revenue-officer, is entrusted with
public money and is either directed by law, or bound by a contract, express or
implied, with the Government, to pay into a certain treasury all the public money
which he holds. A dishonestly appropriates the money. A has committed criminal
breach of trust.

(f) A, a carrier, is entrusted by Z with
Property to be carried by land or by water. A dishonestly misappropriates the
property. A has committed criminal breach of trust.

1. Ins. by Act 40
of 1973, sec.9 (w.e.f.1-11-1973).

2. Explanation
renumbered as Explanation I by Act 38 of 1975, sec.9 (w.e.f. 1-9-1975).

3. Ins. by Act 33
of 1988, sec.27 (w.e.f.1-8-1988).

4. Ins. by Act 38
of 1975, sec.9 (w.e.f. 1-9-1975).

406. Punishment
for criminal breach of trust. —Whoever commits criminal breach of
trust shall be punished with imprisonment of either description for a term
which may extend to three years, or with fine, or with both.

407. Criminal
breach of trust by carrier, etc.-- Whoever, being entrusted with
property as a carrier, wharfinger or warehouse-keeper, commits criminal breach
of trust in respect of such property, shall be punished with imprisonment of
either description for a term which may extend to seven years, and shall also
be liable to fine.

408. Criminal
breach of trust by clerk or servant. —Whoever, being a clerk or
servant or employed as a clerk or servant, and being in any manner entrusted in
such capacity with property, or with any dominion over property, commits
criminal breach of trust in respect of that property, shall be punished with
imprisonment of either description for a term which may extend to seven years,
and shall also be liable to fine.

409. Criminal
breach of trust by public servant, or by banker, merchant or agent. —Whoever,
being in any manner entrusted with property, or with any dominion over property
in his capacity of a public servant or in the way of his business as a banker,
merchant, factor, broker, attorney or agent, commits breach of trust in respect
of that property, shall be punished with ¹[imprisonment
for life], or with imprisonment of either description for a term which may
extend to ten years, and shall also be liable to fine.

1. Subs. by Act
26 of 1955, sec. 117 and Sch., for “transportation for life” (w.e.f. 1-1-1956).

Posted in: Sections 403 to 409