Sections 403–404 IPC vs Sections 314–315 BNS — Dishonest Misappropriation of Property

In India, Sections 314 and 315 of the Bharatiya Nyaya Sanhita, 2023 (BNS) replaced Sections 403 and 404 of the Indian Penal Code, 1860 (IPC) from 1 July 2024. The definitions are unchanged, but Section 314 now imposes a minimum of six months' imprisonment and a mandatory fine for dishonest misappropriation of movable property.

At a glance

The CrPC First Schedule classified Section 403 IPC as non-cognizable, bailable and triable by any Magistrate, and both rows of Section 404 IPC as non-cognizable, bailable and triable by a Magistrate of the first class (the "Ditto" entries trace to the Section 403 row). The classification of each offence is therefore unchanged.

What changed

Section 314 BNS (IPC 403)

• Modified — punishment: "imprisonment of either description for a term which may extend to two years, or with fine, or with both" becomes "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". Two changes: a minimum term, and fine in addition to imprisonment rather than as an alternative.
• Identical — definition and Explanations: "Whoever dishonestly misappropriates or converts to his own use any movable property" is word for word the same. Explanation 1 (misappropriation "for a time only") and Explanation 2 (the finder rule, with its two closing paragraphs) are carried over.
• Minor edit — Illustrations: in Illustration (c) "joint owners of a horse, A takes" becomes "joint owners of a horse. A takes"; in finder Illustration (b) "bank note" becomes "bank-note". The illustration to Explanation 1 reads "as a security for a loan" in the BNS; the India Code IPC text prints "as a security or a loan".
• Identical — heading: "Dishonest misappropriation of property", under the chapter sub-heading "Of criminal misappropriation of property".

Section 315 BNS (IPC 404)

• Minor edit — "any property": "converts to his own use property, knowing" becomes "converts to his own use any property, knowing". The rest of the section — the knowledge that the property was in the deceased's possession at death and has not since been in the possession of any person legally entitled to it, the three-year term with liability to fine, the seven-year term for a clerk or servant, and the Illustration — is the same.
• Identical — classification and compounding: see "What this means in practice".

Statutory text (relevant extract)

Extract, Section 403 IPC (repealed from 1 July 2024):

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.

Extract, Section 314 BNS:

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.

Extract, Section 315 BNS:

… 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.

How it works — the ingredients

Section 314 has three elements.

1. Movable property — "movable property" is defined in Section 2(21) BNS to include property of every description except land and things attached to the earth or permanently fastened to anything attached to the earth.
2. Misappropriation or conversion to one's own use — Explanation 1 makes a misappropriation "for a time only" enough. Its Illustration: A finds a Government promissory note belonging to Z, pledges it with a banker as security for a loan, intending to restore it to Z later — an offence.
3. Dishonesty — "dishonestly" means doing anything with the intention of causing wrongful gain to one person or wrongful loss to another (Section 2(7) BNS). Illustration (c) marks the line: a joint owner who takes the horse to use it does not misappropriate it, because he has a right to use it; if he sells it and keeps the whole proceeds, he does.

The later dishonest intention — Illustrations (a) and (b) show property that came into the accused's hands without an offence (taken in the mistaken belief that it was his own; borrowed under an impression of implied consent) and was then dishonestly appropriated after the mistake was discovered or the book was sold. In each case the Illustration says there is no theft but there is an offence under this section.

The finder rule (Explanation 2) — a finder who takes property "for the purpose of protecting it for, or of restoring it to, the owner" commits no offence. He becomes guilty 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." The finder need not know who the owner is; it is enough that at the time of appropriating he does not believe it to be his own or in good faith believe the real owner cannot be found. The Illustrations cover a rupee on the high road (no offence), a bank-note in an addressed letter, a bearer cheque whose drawer is named, a purse seen dropped, a purse whose owner is later discovered, and a ring sold at once without trying to find the owner (each an offence).

Section 315 has four elements: dishonest misappropriation or conversion of any property; knowledge that it was in the possession of a deceased person at the time of death; knowledge that it has not since been in the possession of any person legally entitled to it; and, for the seven-year limb, that the offender was employed by the deceased as a clerk or servant at the time of death. Its Illustration: Z's servant misappropriates Z's money after Z dies and before it reaches anyone entitled to it.

Neighbouring offences

• Theft (Section 303 BNS) requires moving movable property out of another person's possession, without consent, intending to take it dishonestly. Where the taking was innocent, Illustrations (a) and (b) to Section 314 point to misappropriation instead.
• Criminal breach of trust (Section 316 BNS) requires entrustment of the property or of dominion over it. Section 314 has no entrustment element.
• Stolen property (Section 317 BNS): under Section 317(1), property "which has been criminally misappropriated" is stolen property, so a person who dishonestly receives or retains it knowing or having reason to believe it to be stolen property may be charged under Section 317(2).

What this means in practice

For the complainant

• Both offences are non-cognizable. Under Section 174(1) BNSS the officer in charge of the police station enters the substance of the information in the prescribed book and refers the informant to the Magistrate; under Section 174(2) no police officer may investigate without the order of a Magistrate having power to try the case. A complaint to the Magistrate is the other route.
• Under Section 359(1) BNSS, Section 314 may be compounded by "the owner of the property misappropriated" without the court's permission, as Section 320(1) CrPC allowed for Section 403 IPC. Section 315 is in neither compounding table, and Section 404 IPC was not compoundable under Section 320 CrPC either.

For the accused and the defence advocate

• Both offences are bailable.
• The minimum term changes sentencing: on a conviction under Section 314, the text requires imprisonment of at least six months and a fine. On a reading of the text, a sentence of fine alone — permitted under Section 403 IPC — is no longer available.
• Section 283(2) BNSS lets a Magistrate, for recorded reasons and after hearing the accused, try summarily offences "not punishable with death or imprisonment for life or imprisonment for a term exceeding three years". On a reading of that text, Section 314 and the three-year limb of Section 315 fall within it; the seven-year clerk-or-servant limb does not.
• Where the facts are a dispute over payment under a contract, U. Dhar (below) is the Supreme Court's reading of what the complaint must show.

For finders and families

• A finder who wants to keep clear of Section 314 should be able to show the reasonable means used to trace and notify the owner and the time allowed for a claim (Explanation 2).
• Section 315 protects an estate in the gap between death and the property reaching a person legally entitled to it. The offence requires knowledge of both facts.

Judgments that still matter

U. Dhar & Anr. v. State of Jharkhand & Anr., [2003] 1 S.C.R. 447 — 20 January 2003. M.B. Shah and Arun Kumar JJ. (judgment by Arun Kumar J.) allowed the appeals and quashed a Chief Judicial Magistrate's order taking cognizance under Sections 403, 406, 420 and 120B IPC and issuing summons, together with the High Court's order refusing to quash it (report p. 451 A). A sub-contractor alleged that the appellants' company had received payment from the principal and misappropriated it instead of paying him. The Court held that payment under the separate head contract "will not give rise to plea of misappropriation of money because that money is not money or movable property of the complainant", and that "dishonestly" and "misappropriate" "are necessary ingredients of an offence under Section 403" (p. 450 E), neither of which was satisfied. The report does not show paragraph numbers. The words construed are repeated in Section 314 BNS.

Chetan v. The State of Karnataka, [2025] 5 S.C.R. 906 (2025 INSC 793) — 30 May 2025. Surya Kant and Nongmeikapam Kotiswar Singh JJ. (judgment by Kotiswar Singh J.) dismissed an appeal against convictions under Section 302 IPC, the Arms Act and Section 404 IPC, where the prosecution alleged that after the killing the appellant took the deceased's mobile phone and gold chain (para 5.3). The Court gave the appellant the benefit of doubt on proof of recovery of the mobile phone and set aside the Section 404 conviction as regards that phone, but sustained it as regards the gold chain (para 11.3), and otherwise dismissed the appeal (para 11.4). The case shows each item said to have been misappropriated being tested separately; it applied Section 404 IPC, which Section 315 BNS repeats with one added word.

No other judgment is cited. The other Supreme Court decisions read for this page decided criminal breach of trust (Sections 405 and 409 IPC), not Section 403 or 404, and are not relied on.

Why these still matter: the operative words of Sections 403 and 404 IPC — "dishonestly misappropriates or converts to his own use", the Explanations and the knowledge elements — are repeated in Sections 314 and 315 BNS. On a reading of the text, judgments construing those words remain relevant; judgments on sentence under Section 403 do not account for the new minimum.

Which law applies to your case

Section 358(2) BNS saves any penalty or punishment incurred under the IPC and lets proceedings be instituted, continued or enforced "as if that Code had not been repealed"; on a reading of that provision, misappropriation before 1 July 2024 is charged under Section 403 or 404 IPC. Procedure in matters pending on that date continues under the CrPC (Section 531(2)(a) BNSS). Article 20(1) of the Constitution bars "a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence"; on a reading of that Article, the six-month minimum and mandatory fine in Section 314 cannot be applied to earlier conduct. See which law applies to an offence before 1 July 2024.

Frequently asked questions

What is the BNS equivalent of Section 403 IPC? Section 314 of the Bharatiya Nyaya Sanhita, 2023 replaces Section 403 IPC. The definition — dishonestly misappropriating or converting to one's own use any movable property — and both Explanations are the same. The punishment is now imprisonment of either description of not less than six months and up to two years, and fine.

Has the punishment for criminal misappropriation increased under the BNS? The maximum is unchanged at two years, but Section 314 BNS adds a minimum term of six months and makes fine mandatory ("and with fine"). Section 403 IPC allowed imprisonment up to two years, or fine, or both, so a court could impose fine alone. Section 315 BNS keeps the Section 404 IPC punishments: up to three years and fine, or up to seven years if the offender was the deceased's clerk or servant.

Is it an offence to keep money or property I find? Explanation 2 to Section 314 BNS says a finder who takes property to protect it for, or restore it to, the owner commits no offence. The finder is guilty 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 notify the owner and kept it a reasonable time. What is reasonable is a question of fact.

Is dishonest misappropriation bailable and compoundable? Yes. The BNSS First Schedule lists Section 314 as non-cognizable, bailable and triable by any Magistrate, and Section 315 as non-cognizable, bailable and triable by a Magistrate of the first class. Under Section 359(1) BNSS, Section 314 may be compounded by the owner of the property misappropriated without the court's permission; Section 315 is not in either compounding table.

What is the difference between criminal misappropriation and criminal breach of trust? Criminal breach of trust under Section 316 BNS requires that the accused was first entrusted with the property or with dominion over it. Section 314 BNS has no entrustment element; Illustrations (a) and (b) show property that came into the accused's hands innocently and was later dishonestly appropriated. Theft under Section 303 BNS differs again because it requires dishonest taking out of another's possession without consent.

Can a payment dispute be prosecuted as criminal misappropriation? In U. Dhar v. State of Jharkhand, [2003] 1 S.C.R. 447, the Supreme Court quashed cognizance under Sections 403, 406, 420 and 120B IPC in a dispute over money due under a works contract. It held that "dishonestly" and "misappropriate" are necessary ingredients of Section 403 and that money received by the accused under a separate contract was not the complainant's movable property.

Which law applies to misappropriation committed before 1 July 2024? Section 358(2) BNS lets proceedings for offences under the IPC be instituted or continued as if that Code had not been repealed, so on a reading of that text earlier conduct is charged under Section 403 or 404 IPC. Article 20(1) of the Constitution bars a penalty greater than the law in force at the time; on a reading of that Article, the six-month minimum and mandatory fine in Section 314 cannot be applied to earlier conduct.

Related

• Theft: IPC 378-382 vs BNS 303-307
• Criminal breach of trust: IPC 405-409 vs BNS 316
• Stolen property: IPC 410-414 vs BNS 317
• Compromise in a criminal case — compounding under BNSS 359
• Offence before 1 July 2024 — which law applies
• IPC to BNS master table

Sources

• Bharatiya Nyaya Sanhita, 2023 (Gazette text): Sections 2(7), 2(21), 303(1), 314, 315, 316(1), 317(1)–(2) and 358.
• Indian Penal Code, 1860 (India Code text): Sections 403 and 404 with their Explanations and Illustrations.
• Bharatiya Nagarik Suraksha Sanhita, 2023 (Gazette text): Sections 174, 283, 359 and 531, and the First Schedule entries for Sections 314 and 315 BNS.
• Code of Criminal Procedure, 1973: Section 320 and the First Schedule entries for Sections 403 and 404 IPC.
• Constitution of India: Article 20(1).
• Judgments read in full text: U. Dhar v. State of Jharkhand (2003_1_447_451_EN.md); Chetan v. State of Karnataka (2025_5_906_960_EN.md).

This page explains the statutory text and the judgments cited as they stand. It is not legal advice; for a specific case, consult an advocate.