Dishonest Misappropriation Vs Criminal Breach Of Trust

Coverage of this Article

KEY TAKEAWAYS

-A brief explanation of Criminal Misappropriation of Property and analysis of some landmark cases.

INTRODUCTION

-Dishonest Misappropriation of Property and Criminal Breach of Trust are two very distinct offences defined under the Indian Penal Code, 1860. Many times it becomes difficult to distinguish between these two offences because of the very thin distinguishing line between the two. In this article, we will look at the differences between these offences.

DISHONEST MISAPPROPRIATION OF PROPERTY

-Criminal Misappropriation of Property is defined under section 403 of the Indian Penal Code, 1860 as - “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”.

CRIMINAL BREACH OF TRUST

-Criminal Breach of Trust is defined under section 405 of the Indian Penal Code, 1860 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 another person so to do, commits criminal breach of trust”.

DIFFERENCES BETWEEN CRIMINALM IS APPROPRIATION OF PROPERTY AND CRIMINAL BREACH OF TRUST

-Dishonest Misappropriation of Property: The property comes into the possession of the accused naturally.

CONCLUSION

-In this article, we have learnt the key differences between Criminal Misappropriation of Property and Criminal Breach of Trust.

KEY TAKEAWAYS

• A brief explanation of Criminal Misappropriation of Property and analysis of some landmark cases.
• A brief explanation of the Criminal Breach of Trust and analysis of some landmark cases.
• Analysis of the key Differences between Dishonest Misappropriation of Property and Criminal Breach of Trust along with a landmark case regarding the differenciation.

INTRODUCTION

Dishonest Misappropriation of Property and Criminal Breach of Trust are two very distinct offences defined under the Indian Penal Code, 1860. Many times it becomes difficult to distinguish between these two offences because of the very thin distinguishing line between the two. In this article, we will look at the differences between these offences.

DISHONEST MISAPPROPRIATION OF PROPERTY

Criminal Misappropriation of Property is defined under section 403 of the Indian Penal Code, 1860 as - “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”.

To constitute the offence of Dishonest Misappropriation of Property some important conditions must be fulfilled. They are:

1. The accused should have misappropriated that property and converted the same for his own use or advantage, dishonestly.
2. The property belonged to the complainant.

An important thing to note within this offence is that, if a person finds a property which is not in the possession of anyone, if they take the possession of that property, after waiting for a reasonable period of time for the original owner to come and claim the property or going through sufficient means to discover the owner of that property, then the person who has appropriated the property has not committed Dishonest Misappropriation of Property.

The reasonable means and the reasonable amount of time depends upon the facts of the case.

Some important landmark cases for Criminal Misappropriation of Property are:

• Ramaswami Nadar v. the State of Madras (AIR 1958 SC 56): In this case, the accused, Ramaswami Nadar, used to conduct competitions as a proprietor of a firm, in a certain competition No. 92, the winners of that prize alleged that the accused did not give them the prize money, which was worth Rupees Thirty one thousand. They claimed that the accused had spent the proceeds of the competitions to pay off his debts worth Rupees Ninety-six thousand, thereby converting the proceeds for his own use. The trial court held that even though the accused business skills were foolish, he could not be booked under section 420 of the Indian Penal Code,1860. The High Court in contrast held that there was an existence of mens rea and a dishonest intention, therefore the accused was guilty of the offence. However, the apex court in alignment with the trial court held that the essential elements which constitute criminal misappropriation i.e., dishonest intention and self – benefit were absent and therefore, acquitted him of all charges.
• Mohammad Ali vs State of Madhya Pradesh (2006 CriLJ 1368)–In this case, the accused, was arrested on the account of criminal misappropriation of electrical wires worth Rupees One thousand eight hundred. This was done due to his inability to produce a receipt of purchase of the electrical wires from Rubban Kabadi. The court held that, merely because of the accused, inability to produce a receipt from Rubban Kabadi, he could not be booked under Section 403 of the Indian Penal Code,1860. It also alleged that since, the police could not record the statement of Rubban Kabadi, alleging that he, that had not sold the electrical wires to the accused, it could not be proved that the accused was guilty, and hence acquitted him of all charges.

CRIMINAL BREACH OF TRUST

Criminal Breach of Trust is defined under section 405 of the Indian Penal Code, 1860 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 another person so to do, commits criminal breach of trust”.

To constitute the offence of Criminal Breach of Trust, the essential conditions which must be fulfilled are:

1. The accused should be entrusted with the property or with the possession or responsibility of the property.
2. The person who is entrusted with that property must

• Covert or misappropriate that property for his own use or advantage
• Use that property or dispose it off dishonestly, or appoint any other person to do so,

1. In violation of any law, which has prescribed the mode in which the property has to be discharged.
2. In violation of any contract made in which it is described how to discharge that property.

Some important landmark cases for Criminal Breach of Trust are:

1. State of Gujarat vs Jaswantlal Nathalal(AIR 1968 SC 700)–In this case, the Government sold a certain amount of cement to the accused, Jaswanthlal Nathalal, for construction. Jaswanthlal Nathalal, instead of using that cement for construction purposes, transferred that cement to a go-down. The Government filed a case against the Jaswantlal, for Criminal Breach of Trust, under section 405 of the Indian Penal Code. The Supreme court held in this case that the accused was not liable for the criminal breach of trust as there was a transaction of sale between the government and the accused and the word ‘entrustment’ was important as it included handing over the property or entrusting the property from the owner to the person entrusted with the property, with the owner still being with the original possessor. Therefore, it was held in this case that the accused is not liable for Criminal Breach of trust, however, he may be liable under another law relating to cement control.
2. State of Uttar Pradesh vs Babu Ram (AIR 1961 SC 751)–In this case, the Sub – Inspector of police was in a village for the investigation of a case of theft. During his investigation, he saw Tika Ram, carrying something in between his dhoti appareland rushing towards a field. Upon searching the Sub – Inspector found a bundle of notes on Tika Ram and seized the cash for further investigation. He later returned the cash, but it was found short of Rupees Two Hundred and Fifty. The Supreme Court held that if the accused had taken the cash for himself, then it would amount to a Criminal Breach of Trust.

DIFFERENCES BETWEEN CRIMINALM IS APPROPRIATION OF PROPERTY AND CRIMINAL BREACH OF TRUST

Some key differences between Dishonest Misappropriation of Property and Criminal Breach of Trust are:

1. Transfer of property:

• Dishonest Misappropriation of Property: The property comes into the possession of the accused naturally.
• Criminal Breach of Trust: The property comes into the possession of the accused either by an express entrustment or by a contractual manner. There is a conversion of the property held by a person in a fiduciary capacity.

2. Nature of Property:

• Dishonest Misappropriation of Property: It can only be a movable property.
• Criminal Breach of Trust: It can be a movable as well as immovable property.

3. Relationship between the victim and the accused:

• Dishonest Misappropriation of Property: There is no contractual relationship between the victim and the accused.
• Criminal Breach of Trust:There is a contractual relationship between the victim and the accused.

4. Nature of Offence:

• Dishonest Misappropriation of Property: It is a Non – cognizable, bailable, compoundable with the permission of the court and is triable by any magistrate.
• Criminal Breach of Trust: It is an It is a Non – cognizable, bailable, non -compoundable and is triable by a magistrate of the first class.

5. Punishment for the offence:

• Dishonest Misappropriation of Property: 2 years of imprisonment or fine or both
• Criminal Breach of Trust: 3 years of imprisonment or fine or both

A landmark case that establishes the difference between Criminal Misappropriation of Property and Criminal Breach of Trust:

Basudeb Patra vs Kanai Lal Halder Opposite Party (1949 CriLJ 382)– In this case, the accused, who was a close friend of the complainant borrowed eight gold bangles and several other gold ornaments from the complainant, a goldsmith, for his daughter's wedding. The accused assured the complainant that he would return the ornaments as soon as the ceremony would be over. But upon the request of the complainant, after the ceremony, the accused did not return the ornaments and outright refused to do it at all. The court, in this case, established a clear difference between Criminal Misappropriation of Property and Criminal Breach of Trust. It said that according to Section 403, the property in question comes to the possession of the accused in a natural manner, whereas in Criminal Breach of Trust, according to section 405 the property is entrusted upon the accused by the complainant. In the present case, the ornaments were handed over to the accused and entrusted upon him by the complainant, therefore the accused was booked under Criminal Breach of Trust.

CONCLUSION

In this article, we have learnt the key differences between Criminal Misappropriation of Property and Criminal Breach of Trust.

Because Criminal Misappropriation of Property and Criminal Breach of Trust are similar offences, it is easy to get confused between the two and make a mistake for framing charges. It is crucial to know the differences between Criminal Misappropriation of Property and Criminal Breach of Trust because, during the framing of charges, it becomes very important that the accused is accused and defended for the right charges. Moreover, during the delivery of a sentence by the judge, it is important to ensure that the accused does not serve a time more than or less than the punishment prescribed for the crime they have committed, otherwise it will lead to the miscarriage of justice.