Law and You > Criminal Laws > Bharatiya Nyaya Sanhita, 2023 > Chapter XVII > Dishonest Misappropriation of Property (Ss. 314 and 315 BNS)

Dishonest misappropriation of property is a recognized offence under the Section 314 of the Bharatiya Nyaya Sanhita, 2023 (BNS). It deals with situations where a person dishonestly converts movable property for their own use, which was initially entrusted to them or came into their possession lawfully. Unlike theft or robbery, criminal misappropriation typically does not involve unlawful taking but rather an abuse of trust or authority. This offence underscores the principle that even lawful possession does not grant the right to misappropriate someone else’s property. The provision plays a crucial role in safeguarding property rights and maintaining public trust in transactions and custodial relationships. It applies to various scenarios, from misuse of funds by employees to withholding goods that were supposed to be returned. Indian courts have consistently emphasized the mental element (mens rea) in determining guilt under this section. This article explores the scope, ingredients, and judicial interpretation of criminal misappropriation under the BNS, highlighting how the law differentiates it from similar offences like theft, criminal breach of trust, and cheating.

Comparative Study BNS and IPC

Bharatiya Nyaya Sanhita, 2023	Indian Penal Code, 1860	Change
S. 314	S. 403	Minimum mandatory imprisonment of six months and with fine added
S. 315	S. 404	No Change

S. 314 BNS:

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 shall not be less than six months but which may extend to two years and with fine.

Essential Ingredients of Dishonest Misappropriation of Property:

• The accused misappropriates or converts property  to his own use;
• Property is movable property;
• He does it dishonestly

Dishonest Intent:

According to Section 2(7) BNS, “dishonestly” means doing anything with the intention of causing wrongful gain to one person or wrongful loss to another person.

In Kesho Ram’s case (1889) PR No.36 of 1889, where the accused was given some money by his master to purchase grain. The accused ran away with the money and later he was arrested with whole money in his possession. The defence defended that accused was not liable under section 403 IPC (S. 314 BNS) for criminal misappropriation because money has been found intact and he had not converted to his own use. But the court held that the first possession being lawful, the misappropriation consisted not in any actual expenditure of the money, but in the mental act or intent to deprive the master of his property without any outward or visible trespass, which was rightly inferred from the conduct of the accused.

Misappropriation of Property:

The accused must have taken or converted the property for their own use. The act of appropriation can take many forms, such as physical taking, use, transfer, or disposal of the property. The accused must have exercised control over the property in some way. Misappropriation takes place means the act is done without consent.

Illusrations:

• Illustration (a) attached to S. 314 BNS: A takes property belonging to Z out of Z’s possession, in good faith believing at the 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.
• Illustration (b) attached to S. 314 BNS: 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 S. 314 BNS.
• Illustration (c) attached to S. 314 BNS: A and B, being, joint owners of a horse. A takes the horse out of B’s possession, intending to use it. Here, as A has a right to use the horse, he does not dishonestly misappropriate it. But, if A sells the horse and appropriates the whole proceeds to his own use, he is guilty of an offence under this section.
• Illustration attached to Explanation 1 of S. 314 BNS:  A finds a Government promissory note belonging to Z, bearing a blank endorsement. A, knowing that the note belongs to Z, pledges it with a banker as a security for a loan, intending at a future time to restore it to Z. A has committed an offence under this section.

In all these illustrations we can see that whenever the person is acting in a good faith is not guilty under S. 314 BNS, but once he does it does dishonestly, he is guilty of the offence under this section. The second part of each illustration shows misappropriation of the property.

In Ramaswamy Nadar vs the State of Madras, 11 October, 1957 case, the Supreme Court interpreted the phrase “converts to his own use” as mentioned in Section 403 of the Indian Penal Code (S. 314 BNS). The court held that it implies the accused has utilized the property in a manner that goes against the rights of the actual owner of the property.

In State of Madhya Pradesh vs Pramod Mategaonkar, 1965 CRILJ 562 case it was established that misappropriation of property can be deemed as temporary or permanent, and no endorsement or approval is necessary to establish this offence.

Position of Finder of a Lost Article:

Movable property are subject matter of criminal misappropriation. In criminal misappropriation it may be innocent taking or lawful taking of the property at the beginning but subsequently it is dishonestly misappropriated. Finder of the goods are also liable under the section in certain cases.

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.

It is not necessary that the finder 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 believe that the real owner cannot be found.

• Illustration (a) attached to Explanation 2 of Section 314 BNS: A finds a rupee on the high road, not knowing to whom the rupee belongs, A picks up the rupee. Here A has not committed the offence defined in this section.
• Illustration (b) attached to Explanation 2 of Section 314 BNS: A finds a letter on the road, containing a bank-note. From the direction and contents of the letter he learns to whom the note belongs. He appropriates the note. He is guilty of an offence under this section.
• Illustration (c) attached to Explanation 2 of Section 314 BNS: A finds a cheque payable to bearer. He can form no conjecture as to the person who has lost the cheque. But the name of the person, who has drawn the cheque, appears. A knows that this person can direct him to the person in whose favour the cheque was drawn. A appropriates the cheque without attempting to discover the owner. He is guilty of an offence under this section.
• Illustration (d) attached to Explanation 2 of Section 314 BNS: A sees Z drop his purse with money in it. A picks up the purse with the intention of restoring it to Z, but afterwards appropriates it to his own use. A has committed an offence under this section.
• Illustration (e) attached to Explanation 2 of Section 314 BNS: A finds a purse with money, not knowing to whom it belongs; he afterwards discovers that it belongs to Z, and appropriates it to his own use. A is guilty of an offence under this section.
• Illustration (f) attached to Explanation 2 of Section 314 BNS: A finds a valuable ring, not knowing to whom it belongs. A sells it immediately without attempting to discover the owner. A is guilty of an offence under this section.

All these illustrations indicate it is the movable property misappropriated dishonestly.

Recovery of Money:

In U. Dhar v. State of Jharkhand (2003) case, the Supreme Court held that the word ‘dishonestly’ and ‘misappropriate’ are necessary ingredients of an offence under Section 403 IPC (S. 314 BNS). Any dispute being about recovery of money is purely of civil nature. Hence, a criminal complaint regarding such a matter is not maintainable.

Punishment for Dishonest Misappropriation of Property:

Imprisonment of either description for a term which shall not be less than six months but which may extend to two years and with fine.

Note that in this case minimum punishment is prescribed.

Classification of Offence:

The offence under this section is Non-Cognizable, Bailable, and triable by any Magistrate.

S. 315 BNS:

Dishonest Misappropriation of Property Possessed by Deceased Person at the Time of his Death:

Whoever dishonestly misappropriates or converts to his own use any property, knowing that such property was in the possession of a deceased person at the time of that person’s decease, and has not since been in the possession of any person legally entitled to such possession, shall be punished with imprisonment of either description for a term which may extend to three years, and 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 or servant, the imprisonment may extend to seven years.

Illustration:

Z dies in possession of furniture and money. His servant A, before the money comes into the possession of any person entitled to such possession, dishonestly misappropriates it. A has committed the offence defined in this section.

Essential Ingredients of S. 315 BNS:

• The accused misappropriates or converts property  to his own use;
• Property is movable property;
• The property was in the possession of a deceased person at the time of that person’s death;
• The property is in not possession of any person legally entitled to such possession; and
• He does it knowingly and dishonestly

Punishment:

• Imprisonment of either description for a term which may extend to three years, and 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 or servant, the imprisonment may extend to seven years.

Classification of Offence:

The offence under this section is Non-Cognizable, Bailable, and triable by Magistrate of First Class.

If the offender happens to be a servant or clerk of the deceased person, they may face more severe punishment. In such cases, the accused may be subjected to imprisonment for a period that could extend up to seven years, along with a fine. The reason behind this stricter punishment for servants or clerks is that they share a fiduciary or trust-based relationship with their employer.

Distinguishing between Theft and Dishonest Misappropriation:

Theft	Dishonest Misappropriation
Theft is defined in S. 303 BNS	Dishonest misappropriation is defined in S. 314 BNS
Whoever, intending to take dishonestly any movable property out of the possession of any person without that person’s consent, moves that property in order to such taking, is said to commit theft.	In dishonest misappropriation, a person dishonestly converts movable property for their own use, which was initially entrusted to them or came into their possession lawfully.
Theft involves moving property without the owner’s permission or consent.	Dishonest misappropriation of property involves giving the property with the owner’s approval
In theft initial taking of property is always illegal.	In dishonest misappropriation, initial taking of property may be innocent or lawful.
In case of theft there is invasion of possession of another person’s by wrongdoer.	In case of dishonest misappropriation there is no such infringement of right of possession. In dishonest misappropriation offender is already in possession of the property.
In theft property is moved without the consent of the owner	In case of dishonest misappropriation person might have come into the possession of the property with the consent of the owner.
In theft, moving property out of possession of the possessee is itself an offence.	In dishonest misappropriation, moving property out of possession of the possessee may be innocent or lawful but its misappropriation is an offence.
In case of theft dishonest intension precede taking	In case of dishonest intension follows the taking in dishonest misappropriation.
Example: A, being Z’s servant, and entrusted by Z with the care of Z’s plate, dishonestly runs away with the plate, without Z’s consent. A has committed theft.	Example: A takes property belonging to Z out of Z’s possession, in good faith believing at the 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 dishonest misappropriation.

Conclusion:

Dishonest misappropriation under Section 314 BNS addresses a unique category of offence where the wrongful intent arises after lawful possession is obtained. It serves to uphold the principle that even temporary or accidental possession of property must be handled with honesty and integrity. This provision plays a crucial role in protecting ownership rights and preventing the abuse of trust in various personal and professional relationships.

While often confused with theft or criminal breach of trust, dishonest misappropriation stands apart due to the nature of possession and the timing of the dishonest intention. Indian courts have consistently emphasized the importance of mens rea in establishing guilt under this section, making it essential to prove that the accused knowingly converted property for personal use.

In a society where individuals often entrust others with property—be it through employment, contracts, or even by chance—this offence reinforces the legal obligation to respect the rightful ownership of others. As such, Section 314 BNS ensures accountability and upholds the ethical handling of property within the legal framework.

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