University Institute of Legal Studies

Panjab University, Chandigarh

SUBJECT: THE BHARATIYA NYAYA SANHITA, 2023

TOPIC: ANANLYSE: APPROPRIATION OF PROPERTY DOES NOT

ALWAYS ATTRACT CRIMINAL LIABILITY

In fulfilment of the requirement for

B.A. LLB (Hons.) 3rd YEAR, SEMESTER 6

Submitted To: Submitted By:

Dr. Shivani Gupta Name: - Paavan Sidhu
Section: - B
Roll No.: - 095/22
Table of Contents
S.No. Title Page No.
01 INTRODUCTION 03
02 CONCEPT OF APPROPRIATION 03

03 DEFINITION OF PROPERTY 03

04 DEFINITION OF APPROPRIATION 04

05 CRIMINAL VS. INNOCENT APPROPRIATION 04

06 LEGAL FRAMEWORK IN INDIA 05- 13

i. Theft 05-06

ii. Criminal misappropriation 07-08

iii. Criminal Breach of Trust 09-10

iv. Cheating 11-12

v. Receiving Stolen Property 13

07 CONCLUSION 14
08 REFERENCES 15
INTRODUCTION
The doctrine of appropriation of property is at the heart of many Indian criminal offenses.
Nevertheless, taking or possessing another person's property is not in itself criminal. The
determining elements are the purpose of the act, the existence or absence of dishonesty, and
the context of the appropriation. In legal terms, appropriation refers to the act of taking or
using property for one's own benefit, often without the rightful owner's consent. While this
act may seem inherently wrongful, it is not considered a criminal offence under Indian law
unless certain legal elements—particularly dishonest intention or breach of trust—are
present.

This principle is in accordance with the settled legal maxim, "actus non facit reum nisi mens
sit rea," i.e., "the act does not make a person guilty unless there is a guilty mind." Thus,
appropriation becomes criminal only when it is coupled with the necessary mental state or
mens rea. This report seeks to examine the law of appropriation of property in India under the
Bharatiya Nyaya Sanhita, 2023 (BNS). It deals with statutory provisions, judicial
interpretations and circumstances under which control or use of another's property, though
apparently improper, does not qualify as a criminal offence.

CONCEPT OF APPROPRIATION
Appropriation in the criminal law means assuming or exercising control over property
without the permission of the owner. Such acts as taking, using, converting, or holding
property as one's own are included. But not all instances of appropriation are criminal. To be
criminal, an act not only has to involve such control but also fulfill the intentional and legal
requirements of a particular offence under the law.

DEFINITION OF PROPERTY
The term "movable property" is defined by Section 22 of the Bharatiya Nyaya Sanhita, 2023
as:

The term 'movable property' is meant to embrace corporeal property of any description, other
than land and things affixed to the earth or permanently fixed to anything affixed to the earth.

This definition makes a difference between immovable and movable property. Movable
property entails items like electronics, jewelry, and motor vehicles, while immovable
property entails buildings and land. This makes a critical difference because the different
provisions of the BNS differ depending on whether immovable or movable property is
involved.
DEFINITION OF APPROPRIATION
Appropriation, in its legal context, refers to the act of taking or usurping possession of
property for personal use, either for a short or extended period of time, and typically without
the consent of the owner. Appropriation is an integral notion of property offenses like theft,
criminal misappropriation, and criminal breach of trust. Indian law has the following sections
relating to these offenses: Section 303(1) (Theft), Section 314 (Criminal Misappropriation),
and Section 316 (Criminal Breach of Trust) of the BNS.

The principle of appropriation is also embodied in foreign law systems. The UK Theft Act of
1968, for example, provides that:

"Any assumption by a person of the rights of an owner amounts to an appropriation."

This means that even acts such as taking someone else's property as if it were one's own can
qualify as appropriation, regardless of whether the property was physically taken or the intent
to permanently possess it existed.

CRIMINAL VS. INNOCENT APPROPRIATION

Indian law draws an important distinction between innocent and dishonest appropriation.
Innocent appropriation refers to the case of a person appropriating property in ignorance or
without any dishonest intention. These acts usually do not invoke criminal liability.
Conversely, dishonest appropriation, involving intention to permanently deprive the owner or
to make use of the property in a way incompatible with the owner's rights, constitutes a
criminal act.

LINKING PROPERTY AND APPROPRIATION

Under Indian law, appropriation of property becomes criminal when done dishonestly or
without consent. The law distinguishes between:

1. Innocent appropriation, where a person may take another‟s property by mistake or

without fraudulent intent, which typically does not lead to criminal liability.
2. Dishonest appropriation, where a person takes property with the intent to
permanently deprive the owner of it or uses it in a manner inconsistent with the
owner‟s rights, which is criminal.
LEGAL FRAMEWORK IN INDIA
The Bharatiya Nyaya Sanhita, 2023, provides several provisions under which appropriation
of property may be punishable as a criminal offence. The key sections include:

THEFT (SECTION 303 BNS)

Section 303(1) of the BNS defines theft as the dishonest taking of movable property out of
the possession of another person without their consent. For an act to constitute theft,
several essential ingredients must be present. These include: (1) dishonest intention to take
the property, (2) the property must be movable, (3) the property must be taken out of the
possession of another person, (4) the act must occur without the person's consent, and (5) the
act must involve some movement of the property.

The presence of dishonest intention is critical. This intention must exist at the time the
property is taken. If someone takes property under the honest belief that it belongs to them—
even if this belief is mistaken—it does not amount to theft. For instance, if a person
mistakenly takes someone else's bag from a restaurant, believing it to be their own, the act
lacks the required mens rea and therefore cannot be classified as theft.

Moreover, the property must be movable for Section 303(1) to apply. Immovable property,
such as land and buildings, does not fall under the scope of this provision. For example,
uprooting a tree on someone‟s land may be considered mischief or trespass but not theft until
the tree is severed and removed.

The property must also be taken out of another person’s possession. If the property is not
currently possessed by any person and appears to be lost or abandoned, taking it may not
constitute theft unless done with dishonest intent. In such cases, the act may instead fall under
the offence of criminal misappropriation under Section 314.

Consent is another critical factor. If the owner consents—either explicitly or implicitly—to

the taking of the property, the act cannot amount to theft. For instance, if someone borrows a
vehicle with the owner's permission but later uses it for an unintended purpose, it may not be
theft but could amount to breach of trust.

Additionally, physical movement of the property is required. Even the slightest movement
with dishonest intent can constitute theft. The property need not be carried away completely;
the act of moving it from its original place is sufficient.

Section 303 is followed by Sections 304 to 307, which deal with various punishments for
theft depending on the circumstances. Section 303(2) prescribes up to three years of
imprisonment or a fine or both. In cases of repeat offences, the punishment may range from
one to five years of rigorous imprisonment and include a fine. A special provision also states
that if the value of the stolen property is below ₹5000 and the offender is a first-time convict,
they may be sentenced to community service if they return or restore the property.
Furthermore, certain persons cannot be held liable for theft. For example, co-owners or
bailees who are legally entitled to possess the property cannot be charged with theft unless
there is clear evidence of dishonest intention. If a landlord reclaims possession of a property
after lease expiry without using force or deceit, it does not constitute theft, though it may give
rise to a civil dispute.

In Velji Raghavji Patel v. State of Maharashtra 1, the Supreme Court held that a partner
cannot be held guilty of theft for taking partnership property, as each partner has a joint
interest in the firm's assets. However, dishonest appropriation in breach of trust may still
attract liability under a different section. Similarly, in Pyare Lal Bhargava v. State of
Rajasthan 2 it was held that merely removing government documents without dishonest intent
does not amount to theft. The absence of mens rea meant the act could not be classified as a
criminal offence under theft.

1
[1965] 2 S.C.R. 429
2
1963 SC 1094
CRIMINAL MISAPPROPRIATION (SECTION 314 BNS)
Section 314- 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.

Explanation 1.—A dishonest misappropriation for a time only is a misappropriation within

the meaning of this section.

Explanation 2.—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.

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.

Section 314 of the Bharatiya Nyaya Sanhita criminalizes the act of dishonestly
misappropriating or converting to one’s own use any movable property. This section
applies particularly in cases where a person comes into possession of property lawfully or
innocently but later chooses to use it dishonestly. The punishment prescribed includes
imprisonment for a term not less than six months and which may extend up to two years,
along with a fine.

According to Explanation 1, even temporary dishonest misappropriation falls within the

scope of this provision. Explanation 2 provides that a person who finds lost property is not
guilty of an offence if they take it with the intention of protecting or restoring it to its rightful
owner. However, if the finder knows who the owner is or has the means to discover the
owner and still uses the property for personal benefit without making reasonable efforts to
return it, the act becomes criminal.

The core ingredients of the offence are twofold. First, the property must be movable, and
second, the misappropriation or conversion must be done dishonestly. This distinguishes
criminal misappropriation from theft, which involves taking property without consent. In
cases of misappropriation, the initial possession may be lawful—such as finding lost goods or
holding something on behalf of someone else—but it becomes criminal when the person
decides to appropriate it for personal gain.
Situations Where Criminal Misappropriation Does Not Apply

There are several scenarios where criminal liability under Section 314 does not arise:

1. Absence of Dishonest Intention

A person is not criminally liable if they possess the property in good faith, genuinely
believing it belongs to them, or if they intended to return it. For instance, if a person
mistakenly takes someone else's property thinking it to be theirs, and later returns it upon
realizing the error, no criminal offence is committed.

2. No Conversion to Personal Use

Criminal misappropriation requires that the property be set apart for the accused's exclusive
use. Temporary or incidental use without dishonest intent may not qualify. For example, an
employee who uses office supplies for a brief personal task but returns them later is unlikely
to be held criminally liable unless it is proven that the use was dishonest and for personal
gain.

3. Property Not Movable

This provision applies only to movable property. If the item is immovable—such as land or a
building—Section 314 does not apply.

4. Mere Possession Without Conversion

Mere possession or holding of property by mistake or confusion, without actual conversion to
one‟s own use, does not attract liability. For example, if someone mistakenly takes a suitcase
and forgets to return it for a day without any dishonest intent, they cannot be held liable under
this section.

5. Honest Claim of Right or Title

A person who genuinely believes they have a legal or moral right to the property, even if
mistaken, and acts on that belief in good faith, is not criminally liable. For instance, if a
person retrieves a watch previously gifted and believes the gift was not valid, the matter may
be a civil dispute but not a criminal one.

In Krishna Kumar v. Union of India3 the Supreme Court held that mere unauthorized
retention of government property by an employee does not amount to criminal
misappropriation unless there is clear evidence of dishonest intent. Similarly, in Narayan
Swami v. State 4(Madras High Court), it was clarified that unless there is clear intention to
permanently deprive the owner of the property, mere retention alone will not constitute the
offence.
These rulings reaffirm the principle that mens rea, or a guilty mind, is essential in
establishing criminal misappropriation. Without dishonest intent, liability cannot be imposed
even if the property was misused temporarily or mistakenly held.

3
1959 AIR 1390 1960 SCR (1) 452
4
AIR 1963 Mad 308
CRIMINAL BREACH OF TRUST (SECTION 316 BNS)
Section 316 of the Bharatiya Nyaya Sanhita, 2023, addresses the offence of criminal breach
of trust. This provision applies to situations where a person is entrusted with property or has
dominion over it, and then dishonestly misappropriates or uses the property in violation of
a legal contract, law, or trust. The misuse of entrusted property, when done with dishonest
intent, transforms an otherwise civil breach into a criminal offence.

Subsection (1) of Section 316 defines the offence as follows:

"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... commits criminal breach of trust."

The essential ingredients required to constitute this offence are:

1. Entrustment of property to the accused,

2. Dishonest misappropriation or conversion,
3. A violation of legal instructions, fiduciary duty, or contract governing the use or
handling of the property.

Additionally, the provision includes special explanations concerning employers. Under

Explanation 1, an employer who deducts amounts from employee wages for contribution to
Provident Funds or similar funds but fails to deposit them as required by law shall be deemed
to have dishonestly used the funds. Explanation 2 similarly applies to contributions under
the Employees‟ State Insurance Act, 1948.

When Criminal Breach of Trust Does Not Arise

There are clear situations where the offence of criminal breach of trust is not made out,
despite disputes or misuse of property:

1. Absence of Entrustment
The very foundation of the offence is entrustment. If the person was never entrusted with the
property (i.e., not given authority or responsibility over it), criminal breach of trust cannot
arise. For example, if someone takes a car parked on the street without any agreement or trust
involved, the act may amount to theft, but not breach of trust.

2. Civil Dispute Without Criminal Intent

If a transaction is merely contractual in nature, and the accused fails to perform their part of
the agreement without dishonest intent, the matter is civil rather than criminal. For example,
if goods are not delivered on time due to supplier delays, it does not become breach of trust
unless fraudulent conduct is proven.

3. No Dishonest Intention
Dishonesty must exist at the time of the breach. If a person uses entrusted property for a
valid purpose or with genuine belief in their right to do so, the act is not criminal. For
example, a bank employee who uses customer deposits in accordance with bank policy, even
if the bank later fails, cannot be held criminally liable in the absence of dishonesty.
4. Property Was Not Misused
If the entrusted property is used in accordance with the intended purpose or is returned
within reasonable time, no offence is committed. For instance, if a person borrows a vehicle
to deliver goods and takes a slightly different route, the act does not amount to breach of
trust.

5. Unclear or Ambiguous Entrustment

If there is no clearly defined trust relationship, or the nature of the entrustment is
ambiguous or informal, criminal liability may not arise. The courts require specific evidence
that a fiduciary duty was created and breached.

In Anil Saran v. State of Bihar 5, the Supreme Court held that mere breach of contract,
without evidence of dishonest intent at the time of entrustment, does not amount to criminal
breach of trust.

Similarly, in Dalip Kaur v. Jagnar Singh6, the Court emphasized that civil disputes should
not be transformed into criminal cases simply to exert pressure on the other party.
Criminal breach of trust must involve a clear act of dishonest misappropriation.

In Velji Raghavji Patel v. State of Maharashtra 7, it was held that partners in a firm cannot
be held guilty of breach of trust in respect of partnership property unless there is clear
evidence of dishonest appropriation. Since partnership property is jointly owned, each
partner has a legal right over it, making criminal liability harder to establish without specific
breach of duty.

These cases underline that dishonest intent, proven entrustment, and actual misuse of
property are essential to invoke Section 316. Without these elements, the dispute remains
civil in nature and does not warrant criminal prosecution.

5
(1995) 6 SCC 569
6
[2009] 10 S.C.R. 264
7
[1965] 2 S.C.R. 429
CHEATING (SECTION 318 BNS)
Although not exclusively concerned with appropriation of property, the offence of cheating,
as defined under Section 318 of the Bharatiya Nyaya Sanhita, 2023, becomes relevant when
property is acquired through deception or fraudulent inducement. This section applies
where a person deceives another and, as a result, dishonestly induces them to deliver property
or to do or omit something they would not have otherwise done.

The provision states that:

“Whoever, by deceiving any person, fraudulently or dishonestly induces the person so

deceived to deliver any property, or to do or omit to do anything which he would not do or
omit if he were not so deceived, is said to „cheat‟.”

Thus, the key elements of cheating are:

1. Deception of a person,
2. Fraudulent or dishonest inducement,
3. Delivery of property, or causing the person to act or omit to act in a way they
normally wouldn‟t,
4. The presence of mens rea, i.e., intention to cheat at the inception of the act.

This offence differs from theft or misappropriation in that the consent of the victim is
present, but it is obtained through fraud or deception. The act becomes criminal because the
consent was not free or informed, but manipulated through a dishonest act or
misrepresentation.

When Cheating Does Not Attract Criminal Liability

There are several important situations where an allegation of cheating may fail to attract
criminal liability:

1. Absence of Deception or False Representation

If there is no act of deception or false promise at the beginning of the transaction, the offence
of cheating does not arise. For instance, if a person enters into a transaction in good faith and
later fails to fulfil the terms, it may amount to breach of contract but not cheating.

2. No Fraudulent or Dishonest Intention at Inception

Criminal liability under this section is contingent upon establishing that the person intended
to deceive from the outset. If the intention to cheat develops later—after a genuine
agreement was entered into—the act remains a civil matter.

3. Mere Breach of Contract

The courts have repeatedly held that a mere failure to fulfil a contract does not constitute
cheating. In Hridaya Ranjan Prasad Verma v. State of Bihar 8, the Supreme Court
emphasized that fraudulent or dishonest intention must exist at the time of making the
promise. If the person genuinely intended to deliver on the agreement but failed due to
unforeseen circumstances, it does not amount to cheating.

8
2000 (4) scc 168
4. Promise Made Without Malafide Intent
If a person promises to do something and later becomes unable to perform due to genuine
reasons (e.g., financial loss or external factors), and there was no intent to defraud at the time
of making the promise, the act remains outside the ambit of Section 314.

5. Lack of Causal Link Between Deception and Loss

For cheating to be established, the deception must be the direct cause of the victim‟s action
and resulting harm. If the act or omission would have occurred regardless of the alleged
misrepresentation, criminal liability does not arise.

In S.W. Palanitkar v. State of Bihar 9, the Supreme Court warned against converting civil
disputes into criminal prosecutions. It noted that where a complaint essentially discloses a
civil wrong, it should not be dressed up as a criminal offence to intimidate or coerce the other
party.

Similarly, in G.V. Rao v. L.H.V. Prasad 10, the Court observed that cheating requires a
fraudulent or dishonest intention from the beginning. A failure to honour a business deal
due to subsequent financial failure or disputes does not by itself prove cheating.

9
(2002) 1 SCC 241
10
(2000) 2 SCC 693.
RECEIVING STOLEN PROPERTY (SECTIONS 317 BNS)
The appropriation or retention of stolen property is treated as a serious offence under Indian
criminal law. Sections 317 of the Bharatiya Nyaya Sanhita, 2023, address the criminal
liability associated with receiving property that has been previously stolen or obtained
through dacoity. These provisions are designed to deter individuals from knowingly engaging
with or benefiting from the proceeds of crime. Section 317 punishes any person who
dishonestly receives or retains stolen property, knowing or having reason to believe that it
is stolen. The essential elements of the offence include the presence of mens rea, i.e., a guilty
mind in the form of knowledge or reasonable belief that the property in question was
obtained unlawfully. Section 317, on the other hand, deals specifically with property
associated with dacoity and prescribes more stringent punishment due to the aggravated
nature of the offence. It is important to note that mere possession of stolen property is not
sufficient to establish criminal liability under these sections. The prosecution must prove
that the accused knew, or had reason to believe, that the property was stolen. If the person
came into possession of such property innocently and without awareness of its criminal
origin, no offence is committed. The presence or absence of dishonest intent remains the
decisive factor.

There are several circumstances under which the appropriation of stolen property does not
amount to a criminal offence. Firstly, if the person did not know and had no reason to
believe that the property was stolen, they cannot be held liable. For instance, a buyer who
purchases a second-hand laptop from a reputable shop and receives a valid receipt would not
be guilty, even if the item later turns out to be stolen, provided there was no suspicion or red
flags at the time of purchase.

Secondly, the law recognizes the defence of a bona fide purchaser for value without
notice. If someone acquires stolen property through a lawful transaction and in good faith,
without knowledge of its origin, they are protected under this section. This principle was
upheld in T.T. Antony v. State of Kerala11, where the court clarified that mere possession is
not incriminating; criminality arises only when accompanied by the mental element of
dishonesty.

Thirdly, involuntary or unknowing possession does not attract liability. If someone

inadvertently comes into possession of stolen goods, for example, if a friend plants stolen
items in their bag without their knowledge, they cannot be held liable unless it is proven that
they were aware or became aware and still retained the property dishonestly.

Finally, if the possessor of stolen property returns it promptly upon discovering its true
nature, or reports it to authorities, this may serve as evidence of a lack of dishonest intent. In
such situations, criminal liability under Sections 317 is unlikely to be established, as the
person‟s conduct reflects good faith and cooperation with the law.

Thus, the legal position under the BNS is clear: appropriation of stolen property does not
automatically lead to criminal prosecution. The determining factor is the recipient‟s state
of mind and whether they acted with knowledge, suspicion, or dishonest intent. The law
strikes a balance between punishing those who aid in the circulation of stolen goods and
protecting innocent purchasers or possessors who act in good faith.

11
(2001) 6 scc 181
CONCLUSION
The appropriation of property, while often associated with criminal behaviour, does not
inherently constitute a crime under Indian law. The legal framework established in the
Bharatiya Nyaya Sanhita, 2023 clearly indicates that criminal liability for appropriation
arises only when specific legal elements are fulfilled, particularly the presence of dishonest
intention and mens rea. Property-related offences such as theft (Section 303), criminal
misappropriation (Section 314), criminal breach of trust (Section 316), and cheating
(Section 318) each involve unique factual and legal considerations, but all share a
fundamental reliance on the mental state of the accused.

Through a detailed analysis of statutory provisions and judicial interpretations, it becomes

evident that not all control, possession, or use of another’s property leads to criminal
consequences. Acts done in good faith, under a mistaken belief of ownership, or without
dishonest motive typically do not attract criminal liability. Similarly, civil breaches of
contract or trust, without fraudulent or dishonest intent, fall outside the scope of criminal
law and should be resolved through civil remedies.

Furthermore, in the context of receiving stolen property, the law maintains a high threshold
of culpability, requiring clear proof of knowledge or reason to believe that the property was
stolen. Innocent purchasers or possessors acting in good faith are protected under law,
reinforcing the principle that intent, not mere act, determines criminality.

The judiciary has consistently emphasized the need to distinguish between civil wrongs and
criminal offences to prevent the misuse of criminal law as a tool for coercion or harassment
in private disputes. This principle reinforces the foundational legal maxim: “actus non facit
reum nisi mens sit rea” — an act alone does not make a person guilty unless accompanied by
a guilty mind.

In conclusion, the report demonstrates that criminal liability for appropriation of property
is not automatic. It depends on a nuanced interplay of legal provisions, intent, consent, and
context. The Indian legal system, through both legislative provisions and judicial guidance,
ensures that only those acts which are truly wrongful in both conduct and mindset are brought
under the purview of criminal law. Such an approach not only preserves the fairness of the
justice system but also protects individuals from undue penal consequences in cases where no
criminal intent exists.
REFERENCES
1. Bharatiya Nyaya Sanhita, 2023.

2. Commentary on Bharatiya Nyaya Sanhita, 2023 by K.D. Gaur

3. Legal articles and journals from SCC Online and Manupatra

4. https://blog.ipleaders.in/receipt-of-stolen-property/

5. https://blog.ipleaders.in/cheating-a-criminal-offence-under-the-indian-penal-code/

6. https://lawbhoomi.com/criminal-misappropriation-of-property-ipc/

7. https://blog.ipleaders.in/criminal-misappropriation-and-breach-of-trust/