BNS Section 314: Dishonest Misappropriation of Property

Offence

This section deals with appropriation of property that rightfully belongs to someone else. In very basic words, it defines misappropriation as converting any kind of movable property belonging to someone else for one’s own use without the express authorisation or knowledge of the rightful owner. three illustrations have been provided to demonstrate the application of the provisions of this section. Let us take a look

(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.

In this section A has taken Z’s property thinking that the property is his, which is an honest mistake. The lawful course that A should take upon realising his mistake is to return the item to Z. However, if A chooses to keep quiet and take advantage of Z’s unawareness, then it shall be considered 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.

This illustration demonstrates the importance of intent in this section. Because while A may presume that Z does not have a problem with borrowing the book, Z may not necessarily think that way and A’s presumption can be misplaced. So technically speaking, A has dispossessed Z of his property without his permission. However, if A has no intention of claiming the book as his own and has genuinely misunderstood the liberties he can take with Z on account of their friendship, then it cannot be considered a crime. However, as pointed out, if A sells the book or gifts it to someone else, then it shall be a crime because the right to sell or gift a book to someone belongs solely to the owner of the property and so by doing this A has misappropriated Z’s property.

(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.

This illustration demonstrates how there can be misappropriation of property even amongst joint owners. A joint ownership is governed by certain rules as to how the property shall be shared between the two owners. This may be a written agreement or just an understanding in good faith. If the boundaries of these rules are overstepped, it can amount to misappropriation of property. Here, A has blatantly flaunted the basic rule of joint property which is that when a property realises its commercial value, the money is split between both owners equally.

As it can be noticed above, misappropriation can be a complex offence and there are several nuances to the provisions made to address this offence. Two more aspects of misappropriation have been demonstrated in the form of explanations. Let us take a look at the explanations provided under the section.

Explanation 1 states that when a property is misappropriated for a short period of time and with the intention of returning it, as long as it has been appropriated without the authorisation or knowledge of the owner, it shall be considered an offence for the purpose of this section. Let us look at the illustration that has been provided to demonstrate this form of misappropriation.

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.

Here we can clearly see that A has every intention of returning the promissory note to Z. Even if A is on friendly terms with Z and sure that Z would not mind, there is one factor that makes this an offence. A is involving the banker as a third party and fraudunlently representing to the banker that the promissory note has been endorsed by Z in the name of A. And this makes it a case of misappropriation because if A fails to repay the loan, Z would be legally obligated to make good such payment. This makes the entire transaction illegal as Z has not agreed to take upon this legal obligation. This can either put the banker or Z in legal trouble. This is the factor that differentiates this scenario from a case where a person borrows a book from another person without informing them because there is no creation of a legal obligation in that scenario.

Explanation 2 demonstrates how claiming lost and found property can amount to misappropriation. The general rule of ‘finders keepers’ can be considered valid by the law only after the finder of the lost property has taken certain measures to trace the owner and return the property. Only when the finder of such property is absolutely convinced that the owner cannot be traced, he or she can appropriate such property as their own. The conditions for such appropriation are listed as follows:

The possession of the property has been taken for the purpose of protecting it and restoring it to the owner.

Reasonable means have been employed to trace the owner

Reasonable means have been employed to provide notice to the owner via general or specific announcements.

Reasonable time has been allowed for the owner to retrace the property

If the person who finds misplaced property appropriates it for him or her self without undertaking the measures above, then he or she shall be considered an offender under the provisions of this section. The explanation further clarifies that ‘reasonable means’ and reasonable time’ depends on the facts of the case.

For instance if the value of the misplaced property is very low, then the means that should be employed to find the owner cannot be expected to be greater than the value of the item.

Similarly, if the item has been found in a place like a highway or a tourist spot, the chances of the owner returning to the location can be presumed as fairly low. And hence, the amount of time that can be considered as reasonable in such a case need not be very long as compared to finding a misplaced item in an office, where the chances of retracing the owner are very high.

Further, it adds that as long as the finder of the item genuinely believes that he or she has exhausted all reasonable means of finding the owner, then appropriation of the item by the finder in such a case shall not be considered as misappropriation. Let us look at the illustrations that have been provided to demonstrate this aspect of the offence.

(a) 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.

As you can see, the value of the found item is so low that the effort to trace and return the item will exceed the value of the item in terms of cost. And while one is free to do so, the law does not reasonably expect a person to do so before appropriating such asset.

(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.

This illustration demonstrates that when there is means to identify and return the item to the original owner, appropriating such an item is abjectly an offence under the provisions of 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 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.

Here, A has the means to find the person to whom the cheque has been issued because he or she has the means of finding the person who issued the cheque. So if A does not follow this trail to see what end it leads to, then it cannot be said he or she has employed reasonable means to identify the owner. Further, it must be noted that the cheque is a bearer cheque and A can actually convert the chequer into cash. This adds value to the cheque. And so, A is obliged to find the owner of the cheque as the value of the cheque is not lesser than the effort that goes into tracing the owner. However, if it was a crossed cheque and issued to a specific person, then the cheque has no value to anyone other than the person to whom it has been issued. In such a case, A can simply dispose of the cheque rather than look for the owner.

(d) 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.

While A took the wallet with the intention of returning it, there is no mention of the steps taken by A to return the wallet to Z. Since A has not taken any reasonable measure to return the wallet before appropriating it, it amounts to misappropriation of assets under the provisions of 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.

Here, even though A did not know the identity of the owner of the wallet at the time of taking it, he did discover the identity before appropriating it. Here, A has the option of returning the wallet in tact but has chosen against it and hence this amounts to misappropriation of property. If A had found out the identity of the owner of the wallet after appropriating it, then it would be a question of how long did A wait before appropriating it. If it is found to be reasonable, taking all the facts of the case into consideration, then it shall not be considered an offence under the provisions of 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.

This illustration demonstrates the importance of employing a reasonable amount of effort in tracing the owner and waiting for a reasonable amount of time before appropriating it. Given that it is a valuable ring, two things are clear. It is an expensive ring, hence A must put in a good amount of effort to find the owner. And given that a ring is usually an object of intimate importance to most people, A must wait a good amount of time before appropriating it for his or her own use.

Punishment

Any person found guilty of misappropriating property shall be punished with imprisonment for a term not less than six months and which may extend to two years along with fine.

The above actions may not be an offence under this section if:

However, there may be other sections under the BNS under which the above actions can be prosecuted and while they may be disqualified under the provisions of this section, such actions will still be punishable under the provisions of those respective sections of the BNS.