CRIMINAL MISAPPROPRIATION vs CRIMINAL BREACH OF TRUST

This article discusses the differences between dishonest misappropriation under Section 403 and Criminal Breach of Trust (Section 405) of the Indian Penal Code.

Dishonest Misappropriation is codified in Section 403 of the Indian Penal Code. Its elements are as follows:

  • Dishonestly
  • Converts to their own use

It implies either using or dealing with the property in derogation of rights of owner (Ramaswami Nadar v State of Madras[1])

  • Any movable property

ILLUSTRATION: If A takes B’s book without his consent, and sells it for his own benefit, he has committed Criminal misappropriation, and will be punished with 2 years imprisonment or fine or both. If A took something from B by mistake in good faith, there is no misappropriation of property because dishonest intention is missing. Similarly, finders of goods will not be punished for the offence, since the intention was not dishonest at the time of possession.

Hence, the words ‘dishonestly’ and ‘misappropriate’ are essential elements of the offence.

Criminal Breach of Trust (Section 405 of the Indian Penal Code) occurs when-

  • Someone
  • Who being entrusted with property or dominion over property

Entrustment means control over the property by one person to the other in such a way that the person on whose interests the property is handed over continues to be an owner.[2] (Surendra Pal Singh Vs. State of Uttar Pradesh[3]) Unless there is entrustment, there can be no offence under Section 405.

  • Dishonestly uses and/or disposes of that property

Dishonestly (Section 24 of IPC) generating wrongful loss (Section 23 of IPC) to the one whose property has been used and/or disposed.

  • In violation of law prescribing how the trust is to be discharged, of any legal contract (express or implied) made for the discharge of it, or willfully suffers any other person to do so.

In the case of Mohammed Sulaiman cs Mohammed Ayub and Ors, 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. 

ILLUSTRATION: A, the executor of will of B who is dead, dishonestly appropriates them to his own use rather than dividing it as per the instructions. A has committed criminal breach of trust.

Therefore, the major differences between criminal misappropriation and criminal breach of trust is that in the latter, the person comes into possession of the property in question by the entrustment of the owner himself. This implies that in Criminal Breach of Trust, there is a sort of a contractual relationship between the person and the owner of the property in question. On the contrary, no such contractual relationship is present in the case of Criminal Misappropriation. Moreover, Criminal Misappropriation only deals with movable property, but Criminal Breach of Trust includes both- moveable and immovable properties.

REFERENCES:

https://www.legalbites.in/law-notes-ipc-criminal-misappropriation-and-criminal-breach-of-trust/


[1]Ramaswami Nadar v State of Madras[1]) AIR 1971 Mad 136

[2] Rai D, “Criminal Misappropriation and Breach of Trust” (iPleaders December 11, 2019) <https://blog.ipleaders.in/criminal-misappropriation-and-breach-of-trust/>&nbsp;

[3] Surendra Pal Singh Vs. State of Uttar Pradesh AIR 1957 All 122

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