Dishonest misappropriation of property
Section 403 of the Indian Penal Code, 1860 deals with 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 may extend to two years, or with fine, or with both. The Act came into force on 01 Jan 1862. Repealed by section 358 of the Bharatiya Nyaya Sanhita, 2023 (45 of 2023) with effect from 1 July 2024, but conduct before that date is still charged, tried and appealed under it.
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.
Illustrations
(a) 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.
(b) 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.
(c) 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.
Explanation 1.-A dishonest misappropriation for a time only is a misappropriation with the meaning of this section.
Illustration
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 or a loan, intending at a future time to restore it to Z. A has committed an offence under this section.
Explanation 2.-A person who finds property not in the possession of any other person, and 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.
What are reasonable means or what is a reasonable time in such a case, is a question of fact.
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.
Illustrations
(a) A finds a rupee on the high-road, not knowing to whom the rupee belong, A picks up the rupee. Here A has not committed the offence defined in this section.
(b) 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.
(c) 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.
(d) A sees Z drop his purse with money in it. A pick up the purse with the intention of restoring it to Z, bu afterwards appropriates it to his own use. A has committed an offence under this section.
(e) 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.
(f) 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.
Section 403, The Indian Penal Code, 1860 (Act 45 of 1860).
Now in the Bharatiya Nyaya Sanhita
BNS 314 Dishonest misappropriation of property Text carried over almost unchanged 99%
Measured by comparing the text of the two provisions, not taken from an official correspondence table — there is no machine-readable one. See both texts side by side before relying on it.
Both regimes are live. The repealed enactment still governs what happened while it was in force. We never redirect one to the other.
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Referred to by 8
- Railway Property (Unlawful Possession) Act s. 3 Penalty for theft, dishonest misappropriation or unlawful possession of railway property
- Sikkim Value Added Tax Act 2005 s. 81 Offences and penalties
- West Bengal Co-operative Societies Act s. 137
- West Bengal Co-operative Societies Act s. 139
- West Bengal Co-operative Societies Act s. 150
- West Bengal Sales Tax Act s. 88
- West Bengal Tax On Entry Of Goods Into Local Areas Act s. 14
- West Bengal Value Added Tax Act s. 93
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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U. Dhar v. State of Jharkhand
Court's Decision & Legal Precedent
Judgment of Main Case order-3.pdf 2003-01-20 DATE VERIFIED. Crl A 70/2003. Arun Kumar/M.B. Shah. Isolates IPC 403 ingredients: dishonest misappropriation requires dishonest intention plus conversion; independent contracts and a civil payment dispute do not make out 403. Cognizance quashed. Map ipc 403 + BNS 314 successor (near-identical 0.9939). Do not pad ipc 406/420.
On this section: IPC 403 needs dishonest misappropriation of property; a civil dispute over independent contracts is not criminal misappropriation (U. Dhar).
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Udai Shankar Awasthi vs State of U. P
Court's Decision & Legal Precedent
Where a criminal complaint is filed many years after an alleged instantaneous offence (not a continuing offence), beyond the prescribed limitation period under Section 468 CrPC, without plausible explanation for delay, by a litigant who has exhausted all civil and arbitral remedies and lost therein, and where earlier complaints on substantially identical facts have been dismissed on merits, and where material facts such as earlier dismissals have been suppressed, the complaint constitutes an abuse of the process of court and is liable to be quashed under Section 482 CrPC, regardless of the gravity of the alleged offence or the availability in law to prosecute crimes after long periods. The court must protect innocent persons from harassment by unscrupulous litigants who seek to weaponize criminal proceedings as a tool for vengeance after civil defeat.
On this section: Prescribes punishment for dishonest misappropriation of property. Maximum punishment is 2 years imprisonment or fine or both. Court noted the three-year limitation period applies to this offence.
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Kotak Mahindra Bank LTD vs Hindustan National Glass & Ind. LTD
Court's Decision & Legal Precedent
Wilful defaults of parties in meeting payment obligations to a bank under foreign exchange derivative transactions are covered by the RBI's Master Circular on Wilful Defaulters. The word 'lender' in the definition of wilful default in the Master Circular should be interpreted contextually to mean 'bank' and includes situations where a bank provides non-funded credit facilities such as derivative transactions. The Master Circular applies to all cases of wilful defaults where a party has the capacity to pay but willfully avoids payment of dues to the bank, whether such dues arise from traditional lending relationships or from other banking transactions such as derivative transactions or bank guarantees. The interpretation must be based on the purpose of the Master Circular (to disseminate credit information to caution banks from giving further finance to wilful defaulters), the mischief it seeks to remedy (preventing banks from being exploited by parties who have capacity to pay but willfully avoid payment), and the context in which the circular was issued (pursuant to Central Vigilance Commission instructions to report all cases of wilful defaults of Rs. 25 lakhs and above), rather than on a literal reading of the word 'lender.'
On this section: Sections 403 and 415 provide criminal liability for criminal breach of trust and cheating, which may be invoked against wilful defaulters depending on facts
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K. L. Singh vs State of up
Court's Decision & Legal Precedent
Criminal proceedings for offences alleged to have occurred in 1996, with the claim for damages being rejected in 2001 and communicated thereafter, cannot be initiated in 2011 (more than 9 years after rejection). The alleged offence of misappropriation/criminal breach of trust constitutes an instantaneous offence, not a continuing offence. The injury caused was complete on the date of rejection of the claim. Successive complaints on identical facts filed by frustrated litigants who have failed in civil and arbitration proceedings, after full consideration and dismissal of earlier complaints on merit, constitute abuse of process and are not maintainable under law. The courts must protect innocent persons from being harassed by unscrupulous persons through frivolous criminal complaints.
On this section: Dishonest misappropriation of property. Maximum punishment 2 years or fine. Applied to alleged unlawful possession of articles and documents. Court noted that complaint was time-barred.
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Vishwantaha Tantri vs The State of Delhi
Court's Decision & Legal Precedent
Where loans are sanctioned and disbursed from the head office of a financial institution located in Delhi, and the offence involves criminal misappropriation and breach of trust in relation to those loans, the Delhi court has territorial jurisdiction to try the offence under Section 181(4) CrPC, notwithstanding that the preliminary acts of verification and application submission occurred in another state. The place of receipt and disbursement of the property (money) is the relevant factor for determining jurisdiction in cases of criminal misappropriation and breach of trust, not merely the place where the initial fraudulent acts were committed.
On this section: Offences charged in the FIR including criminal misappropriation, criminal breach of trust, cheating, forgery, and criminal conspiracy; cited in Magistrate's order directing FIR registration
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Karmveer Singh vs State of Rajasthan
Court's Decision & Legal Precedent
In cases involving allegations of misappropriation of funds by an employee entrusted with collection duties, the High Court will not exercise its discretionary jurisdiction under Section 482 CrPC to quash the FIR merely on the ground that the accused has filed a counter-complaint regarding a separate incident of theft. The serious nature of the allegations of criminal breach of trust, cheating, and misappropriation warrants investigation, and the High Court will not interfere with the FIR unless there are compelling grounds to do so.
On this section: Dishonest misappropriation of property - applied to alleged misappropriation of loan instalments
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… Jain @ Mukesh Jain) could not be traced and declared proclaimed offender by the Trial Court on 12.02.2002. 4. The Trial Court framed charges against the accused persons for offences under Section 120B read with Sections 403, 409, 411, 420, 471, 477A and 109 of the Indian Penal Code, <span id="page-4-1"></span><span id="page-4-0"></span>2 'M/s. CN' <span id="page-5-0"></span>1860[4]( page-5-0) read with Section 13 (2) read with Section 13 (1) (d) of the Prevention of Corruption Act, 1988. While the accused nos. 1 and 2 submitted …
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… Jain @ Mukesh Jain) could not be traced and declared proclaimed offender by the Trial Court on 12.02.2002. 4. The Trial Court framed charges against the accused persons for offences under Section 120B read with Sections 403, 409, 411, 420, 471, 477A and 109 of the Indian Penal Code, <span id="page-4-1"></span><span id="page-4-0"></span>2 'M/s. CN' <span id="page-5-0"></span>1860[4]( page-5-0) read with Section 13 (2) read with Section 13 (1) (d) of the Prevention of Corruption Act, 1988. While the accused nos. 1 and 2 submitted …
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… Agnihotri, CJ Both the appeals are directed against the common judgment and order of sentence dated 28.12.2016 in Sessions Trial (Vig.) Case No.02 of 2009 (05 of 2013), whereby and whereunder the appellant in Crl. A. No.01 of 2017 (hereinafter referred to as "A – 1") was convicted of the offences under Section 403; Section 120B (2) read with Sections 403/406 of the Indian Penal Code, 1860 (in short, "IPC") (in regard to cheque Nos.208236 and 208249) and Section 13(2) read with Section 13(1)(d)(ii) of the Prevention of Corruption Act, 1988 (in short, "PC Act") (in regard to the amounts concerning with the said cheques and …
Questions about Section 403
What have the courts held on Section 403 of the Indian Penal Code?
U. Dhar v. State of Jharkhand (20 Jan 2003) is the leading judgment on this section among those set out below: IPC 403 needs dishonest misappropriation of property; a civil dispute over independent contracts is not criminal misappropriation (U. Dhar). Another 5 judgments on this section are set out below, 4 of them from the Supreme Court. They run from 2003 to 2017.
How do I find court cases under Section 403 of the Indian Penal Code?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: IPC 403, section 403 IPC, section 403 of the Indian Penal Code. People searching for it also type ipc 403 in bns and ipc 403 and 406 in hindi. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 6 reported judgments on this section are set out on this page, beginning with U. Dhar v. State of Jharkhand (20 Jan 2003).
What should I read with Section 403 of the Indian Penal Code, and has it changed?
8 other provisions in this corpus refer back to it. For anything done on or after 1 July 2024 the provision to read is BNS 314 (Dishonest misappropriation of property), which replaced it; conduct before that date is still charged, tried and appealed under this section.
When did Section 403 of the Indian Penal Code come into force?
Section 403 of the Indian Penal Code, cited as IPC 403, came into force on 01 Jan 1862, having been enacted on 06 Oct 1860. It is no longer in force.
Other sections of this Act
- 499. Defamation1512 words
- 464. Making a false document1223 words
- 300. Murder1172 words
- 378. Theft980 words
- 108. Abettor745 words
- 350. Criminal force667 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Recovered from the consolidated text published by India Code (item 7b7d4fe6-206b-4e33-81f1-b98b018acaf6). This page is not a substitute for legal advice.