Criminal law: Criminal Breach and Criminal Misappropriation

Reading time : 8 minutes

Introduction

For a crime to be committed, there has to be a presence of both actus reus and mens rea, which essentially means the physical state of a person and the mental state of the person. Now while we talk about the intention of the criminal, one must not forget the fact that every criminal has a mala fide intention (except in some cases) where he/she has some hidden malice set aside which leads him to committing the crime. Today, we are going to explore Section 403 and Section 405 of the Indian Penal Code, 1860.

Section 403 talks about the Criminal Misappropriation of Property, while Section 405 talks about the Criminal Breach of Trust.

Criminal Breach of Trust

The Section 405 of the Indian Penal Code defines the Criminal Breach of Trust as,

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 wilfully suffers any other person so to do, commits “criminal breach of trust”

Criminal Breach of trust in simplified terms is equivalent to a person who has dishonestly and with a presence of mala fide intention has misappropriated the property entrusted to him/her and then disposes it (sold the property, gave the property for rent) without the permission of the real owner of the property by considering the property as his own is said to have committed criminal breach of trust. Furthermore, it also mentions that if the person who dishonestly disobeys any kind of legal contract, be it in the expressed form or the implied form, he/she has said to have committed an offence under section 405 of the Indian Penal Code, 1860. Let us understand this with the help of illustrations:

  1. 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.
  2. A is a warehouse-keeper. Z going 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.

While we talk about the Criminal Breach of Trust, it is important for the readers to understand the kind of relationship established. There are various kinds of relationships established when it comes to the legal point of view, master-servant, parent-child et cetera. Similarly, as it was observed under Jaswantrai Manilal Akhaney v. State of Bombay, AIR 1956 SC 575 that a relationship is created the transferor and the transferee where the transferor is the real owner of the property and the transferee has the legal custody of the property for the benefit of the transferor himself or the transferee has the custody of the property only for the benefit of the transferor himself or someone else.

Essentials of Criminal Breach of Trust

As it was mentioned above, for committing a crime the mens rea plays a pivotal part when it comes to classification of an offence under section 405 of IPC, 1860. Looking back at the definition of Criminal Breach of Trust, the word “entrustment” holds great importance. As observed under Ramaswami Nadar v. State of Madras, AIR 1958 SC 56, the word entrusted is very important as it is essential to prove that the entrustment took place by the transferor to the transferee to prove the required crime as such. The same was observed under Sadhupati Nageswara Rao v. State of Andhra Pradesh, AIR 2012 SC 3242: (2012) 8 SCC 547: 2012 (7) JT 512: 2012 (7) SCALE 63: 2012 Cr LJ 4317.

After the entrustment factor, there is one more factor highlighted under the Sadhupati Nageswara Rao case. This case also highlighted the second essential factor for inviting an offence under Section 405. The second factor is the mala fide/dishonest intention that then proved to be the driving force that resulted in the breach. Following this, it has to be proved that the accused had misappropriated or converted the property in his/her custody to the detriment of the persons who had entrusted it.

Criminal Misappropriation of Property

Section 403 of the Indian Penal Code, 1860 defines Criminal Misappropriation of Property as,

Whoever dishonestly mis-appropriates 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.

Criminal Misappropriation of Property as defined above could be broken down to the transfer of property from the transferor to the transferee in a dishonest fashion/manner for their own benefit, be it monetary or otherwise. Let us understand this with the help of illustrations:

  1. 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.
  2. A, being on friendly terms 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.

As we have now understood the meaning and practical examples of the Criminal Misappropriation of Property, it is also essential to understand the ingredients highlighted under the case U. Dhar v. State of Jharkhand, AIR 2003 SC 974. The two major ingredients highlighted under this case were ‘dishonesty’ and ‘misappropriate’. Furthermore, it was also mentioned that the words ‘converts to his own use’ is necessary to prove an offence under Section 403 of the Indian Penal Code, 1860 as observed under Ramaswami Nadar v. State of Madras, AIR 1958 SC 56.

Difference between Criminal Misappropriation of Property and Criminal Breach of Trust

In misappropriation, the property is obtained by some casualty or otherwise. In criminal breach of trust, the property is obtained due to the true vested interest by the owner on the offender. The property is misappropriated by the offender for his own use. In criminal breach of trust, the property is misappropriated for his own personal use. A breach of trust includes criminal misappropriation, but the converse is not always true.

So these are some of the differences between the above mentioned offences. Now, if we look at more of the differences from the side of the technicalities as mentioned under section 403 and section 406 (Punishment for criminal breach of trust), we will find that the offence of Criminal Misappropriation of Property is bailable in nature and is triable by any magistrate, however, when it comes to criminal reach of trust, it takes the form of non-bailable offence which is only triable by the Magistrate of the first class.

Conclusion

To conclude with, the readers explored the nuances and intricacies of the Section 403 and 405 of the Indian Penal Code, 1860 which talks about criminal misappropriation of property and criminal breach of trust, respectively. When we speak about the above mentioned crimes, they are often in front of the eyes where the offenders take advantage of the lack of legal knowledge amongst the common man who doesn’t understand the perplexities of these sections, prima facie. Hence, there should be awareness drives and campaigns especially for the illiterate and for those who don’t understand in order to make the citizens of the nation aware about the laws prevailing in the country.  

Author: Abeer Tiwari

Editor: Kanishka Vaish, Editor, LexLife India.

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