The word ‘Misappropriation’ deals with a dishonest appropriation and use of another’s property or fund for the sole purpose of one’s own benefit and usage. Criminal Misappropriation takes place when some person has taken other’s property out of goodwill and subsequently changes its intention dishonestly and make the use of the property for his own benefit. Section 403 and Section 404 of Indian penal Code deals with the activity of Criminal Misappropriation. In this article, we will dig deeper into the different aspects of Criminal Misappropriation and know how Criminal Misappropriation is different from Theft. As sometimes, people get confuse between both the terms. But, there is a thin line which makes theft different from Misappropriation


Criminal Misappropriation is defined under Section 403[1] of Indian Penal Code, 1860. The word ‘Misappropriation’ refers to making the use of others fund or property for the benefit of oneself. Section 403[2] of the Indian Penal Code describes ‘Criminal Misappropriation’ as, whoever dishonestly misappropriates or converts any movable property to his own usage and benefit, shall be punished with the imprisonment up to 2 Years or with fine or both. For example, a member of board of directors of a non-profit organization usage the money of the company meant for charity to pay for his new expansive and luxurious car for himself. Misappropriation sometimes also referred as ‘embezzlement’.


To prove the offence of ‘Criminal Misappropriation’, these following ingredients must be fulfilled: –

  1. There must be a ‘Dishonest Intention’.
  2. The defendant must have converted or embezzled the property to his own benefit and usage.
  3. The property must be movable, as immovable property does not come under the arena of this section.


For proving the offence of ‘Criminal Misappropriation’ intention plays a very vital role. At the time of getting possession of the property by Defendant, the intention might not be dishonest but afterward it may change. As Defendant might occupy the property with good faith but after change of intention, he utilizes the property for his own usage.

Illustration (a) – A takes the watch of B in good faith believing that the watch belongs to A at the time of taking it. Till this moment A is not guilty as he is acting in good faith. But, as soon as he finds out that the watch belongs to B, he keeps that and does not return it to B and utilizes that watch for to his own usage, from then he is guilty of an offence under this Section. He will not be liable for theft but for ‘Criminal Misappropriation’.

Illustration (b) – A, being the best friend of B, goes into the library of B in his absence. A takes away a book without B’s permission. In this case, if A was under the impression that he has an implied consent for taking the book, then he is not guilty of any offence, but as soon as he sells that book and use that money for his own benefit, he is guilty under this Section.

Dishonest intention to misappropriate the property may be permanent or temporary in nature. As explained under clause 1 of section 403[3] of Indian Penal Code, if property is already in the possession of a person innocently and later on he dishonestly misappropriates for the property for the time being and again restores the property, he will be liable for ‘Criminal Misappropriation’.

In the case of Albano Dias v. State (1981)[4], the accused was the cashier and did not make the payment of amounts mentioned against the complainant. Further, he also falsely wrote in the cash book that the amounts have been dispensed. The court held that this kind of act cannot be negligent one. Hence, the accused was convicted after studying the evidence and was liable for ‘Criminal Misappropriation’ along with other proven charges.


As sated above, misappropriation refers to taking possession of another’s property and utilizing it for own benefits. The essence of offence is that some property belonging to others which comes under the possession of the accused, innocently, is misappropriated or converted by the accused to his to his own use misappropriation or conversion need not be permanent it may be only for some time. The term states that the use of property found and deal with the property as if it belongs to the finder which actually belongs to someone else. In the case of Ram Bharosey v. State of Uttar Pradesh (1952)[5], it was stated by the court that, if a person finds an object on the road lying on his way and the finder converts that object for his own use by selling it or other way, then it would be known as converting to his own use. But, if defendant retains the property without the actual conversion for his own use, will not amount to Criminal Misappropriation and hence he won’t be guilty, as stated in the case of Emperor v. Phul Chand Dube (1929)[6].


One of the most essential part of Criminal Misappropriation is that the property should be movable. Any immovable property does not come under the ambit of this section. When we talk about movable property, it is same like the movable property explained under section 378[7] for theft, but this is a bit different from theft. In case of theft, the property is taken out of the possessions of plaintiff through dishonest intention, but in the case of ‘Criminal Misappropriation’, the defendant does not have dishonest intention at the time of taking the property but subsequently its intention changes into that.


Section 403 explanation 1[8] clearly specifies that the law will punish the defendant even if he has misappropriated the property for certain period of time or temporarily. As per the law, even if the misappropriation is for short time but it’s still unauthorized and such unauthorized use is illegal. In the case of Khandu Sonu Dhobi v. State of Maharashtra (1972)[9], the accused was working as an agricultural assistant in the soil department authorised by the government of Maharashtra. He was given the task of rectification of agricultural bunds and for which he received the necessary amount of money. The accused prepared a report of rectification even though the rectification task was not properly done by him. Due to various complaints being made, the accused completed the work after several months. The court held that the act of accused of not using the amount provided for the work allotted made no difference to the charge of ‘Criminal Misappropriation’ and thus, it is the case falling within the purview of explanation 1 of Section 403[10]. The accused was held guilty under section 403[11] of Indian Penal Code.


[1] ‘Criminal Misappropriation of Property: Offences against Property. (Section 403 and Section 404 of the Indian Penal Code, 1860)’, SRD LAW NOTES, < >, Accessed on 11 June, 2020.

[2] ‘Criminal Misappropriation of Property’, ADVOCATE KHOJ, < >, Accessed on 11 June, 2020.

[3] ‘Criminal Misappropriation and breach of trust’, I PLEADERS, < >, Accessed on 11 June, 2020.

[4] ‘Criminal Misappropriation of property: Overview’, LEGAL BITES : LAW & BEYOND, < > Accessed on 11 June, 2020.

[5] ‘Criminal Misappropriation of Property’, LAW TIMES JOURNAL, < > Accessed on 11 June, 2020.

[6] ‘Substantive Criminal Law’, EPG PATHSHALA, < > Accessed on 11 June, 2020.

[1] Indian Penal Code, Section 403, (1860)

[2] Supra Note “1”

[3] Indian Penal Code, Section 403, cl 1 (1860)

[4] Albano Dias vs. State (1981), Cr LJ 677

[5] Ram Bharosey vs. State of UP, AIR (1952), All 481

[6] Emperor vs. Phul Chand Dube, AIR (1929), All 917

[7] Indian Penal Code, Section 378 (1860)

[8] Indian Penal Code, Section 403, explanation 1 (1860)

[9] Khandu Sonu Dhobi vs. State of Maharashtra, AIR (1972), SC 958

[10] Supra Note “8”

[11] Supra Note “1”

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s