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    Monday, 13 November 2017

    Criminal Misappropriation and Criminal Breach of Trust

    1. RELEVANT PROVISIONS
    Sections 403 to 409 of P.P.C. 1860.

    2. MEANING OF CRIMINAL MISAPPROPRIATION
    According to Black's Law Dictionary;
    Misappropriation' means; "the unauthorized, improper, or unlawful use of funds or other property for purpose other than that for which intended."

    3. DEFINITION OF CRIMINAL MISAPPROPRIATION; UNDER SECTION 403 PPC
    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."

    Explanation 1:
    A dishonest misappropriation for a time only is a misappropriation within the meaning of 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 it 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 he appropriates it to his own use, when he 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 find should know who is the owner of the property, or that any particular person is the owner of it; it is sufficient if, at the time of appropriating it, he does not believe it to be his own property, or in good faith believes that the rear owner cannot be found.

    4. ESSENTIAL INGREDIENTS OF CRIMINAL MISAPPROPRIATION; UNDER SECTION 403 P.P.C
    The essential ingredients of criminal misappropriation under this section are as follow;

    (I) DISHONESTLY MISAPPROPRIATES
    The term 'dishonestly' has been defined in Section 24 P.P.0 as; "whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing "dishonestly". On the other hand the verb 'to appropriate' in this connection means setting apart for, or assigning to, a particular person or use and to misappropriate means to set apart for or assign to the wrong person or a wrong use.

    (II) CONVERTS TO HIS OWN USE
    To constitute this offence there must be actual conversion of the thing appropriated to the use of some person other than the person entitled thereto. A person obtaining goods of another and disposing of them fraudulently for the benefit of himself or a third person is guilty of conversion.

    (III) ANY MOVEABLE PROPERTY
    The misappropriation of movable property which has been defined Under Section 22 P.P.0 as "The words "movable property" are intended to include corporeal property of every description, except land and thing attached to the earth or permanently fastened to anything which is attached to the earth." There cannot be any criminal misappropriation with regard to immovable property.

    (IV) PUNISHMENT UNDER SECTION 403 P.P.C
    Section 403 also prescribes the punishment for anybody who is found guilty of criminal misappropriation. It says that anybody guilty of criminal misappropriation would be liable to
    (i)            Imprisonment of either description for a term which
    may extend to two years, or
    (ii)           Fine, or
    (iii)          Both.

    5. PUNISHMENT FOR DISHONEST MISAPPROP RIATION OF PROPERTY POSSESSED BY DECEASED PERSON AT THE TIME OF HIS DEATH; UNDER SECTION 404 P.P.C
    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 shall be punished with 
    (i)            Imprisonment of either 'description for a term which may extend to three years; and
    (ii)           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 to servant,
    (iii)          The imprisonment may extend to seven years.

    6. MEANING AND DEFINITION OF CRIMINAL BREACH OF TRUST

    (I) ACCORDING TO BLACK'S LAW DICTIONARY
    "Term breach of trust means; the wrongful misappropriation by a trustee of any fund or property which had been lawfully committed to him irk` a fiduciary character."

    (II) STATUTORY DEFINITION UNDER SECTION 405 P.P.C: Criminal breach of trust
    "Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or convicts 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."

    Explanation:

    'A' being executor of the will of the deceased person, dishonestly disobeys the law which directs him to divide the effects according to the will, and appropriates them to his own use.

    7. ESSENTIAL INGREDIENTS OF CRIMINAL BREACH OF TRUST; UNDER SECTION 405 P.P.C
    The essential ingredients of criminal breach of trust are as follow

    (I) ENTRUSTING ANY PERSON
    The word entrustment in Section 405 connotes that the accused holds the property in a fiduciary capacity. One of the ingredients of the offence of criminal breach of trust is that the person accused must have been entrusted with the property in question.

    (II) MISAPPROPRIATION OR CONVERSION
    For an offence of criminal breach of trust besides showing that the property was entrusted to the accused it is further necessary to show that he had dishonestly misappropriated or converted it to his own use. Therefore in absence of any allegation of misappropriation or conversion of the property by the accused, an offence under Section 406 is not constituted.

    (III) DISPOSAL IN VIOLATION OF ANY LAW OR CONTRACT
    Where the contract is such that it creates a trust in respect of the property alleged to have been misappropriated and converted, this section is attracted. It means that where there was a contract of trust in order to hold certain property in question and the same is violated by disposing of the property in any manner other than that was incorporated in the contract, it would amount to criminal breach of trust. Accused shall also be liable under this section if he does any act in violation of law concerning the trust.

    (IV) DISHONESTLY
    Another important ingredient of criminal breach of trust is that misappropriation or conversion must be the result of dishonesty.

    8. PUNISHMENT FOR CRIMINAL BREACH OF TRUST:
    (I) GENERAL PUNISHMENT;. UNDER SECTION 406 P.P.C:
    Whoever commits criminal breach of trust shall be punished with;
    (i)            Imprisonment of either description for a term which  may extend to seven years, or
    (ii)           Fine, or
    (iii)          Both.

    (II) PUNISHMENT FOR CRIMINAL BREACH OF TRUST BY CARRIER, ETC. UNDER SECTION 407 P.P.C
    Whoever being entrusted with property as a carrier, wharfing or ware house-keeper, commits criminal breach of trust in
    (i) respect of such property, shall be punished with
    (ii) Imprisonment of either description for a term which may extend to seven years, and Shall also liable to fine.
    Here wharfinger is one who is the owner of wharf.

    (III) PUNISHMENT FOR CRIMINAL BREACH OF TRUST BY CLERK OR SERVANT; UNDER SECTION 408 P.P.C:
    Whoever being clerk or servant with regard to the property of the claimant commits criminal breach of trust shall be punished with;
    (i) Imprisonment of either description for a term which may extend to seven years, and
    (ii) Shall also liable to fine.

    (IV) PUNISHMENT FOR CRIMINAL BREACH OF TRUST BY PUBLIC SERVANT, OR BY BANKER, MERCHANT OR AGENT; UNDER SECTION 409 P.P.C:
    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 criminal breach of trust shall be punished with;
    (i)            Imprisonment of either description for a term which may extend to ten years, and

    (ii)           Shall also liable to fine.
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