The offence of criminal misappropriation consists in dishonest misappropriation or conversion to his own use any movable property. [S. 403], it takes place when the possession has been innocently come by, but by a subsequent change of intention, or from the knowledge of some new fact with which the party was not previously acquainted, the retaining becomes wrongful and fraudulent. A takes property belonging to Z out of Z does possession in good faith believe, 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 Section 403 of dishonest misappropriation of property. Similarly 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 and appropriates the whole proceeds to his own use, he is guilty of an offence under Section 403, I.P.C.
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Explanation 1 to Section 403 provides that a dishonest misappropriation for a time only is misappropriation within the meaning of this section.
For example, A finds 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.
Explanation 2 to this section provides that 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 defined above, if he appropriates it to his own use, when he knows or has the means to discovering the owner, or before he has used reasonable means to discover and give notice to the owner and has kept the property for a reasonable time to enable the owner to claim it.
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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 the owner of the property is 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 believes that the real owner cannot be found.
The charge against the accused related to preparation of false documents because even though no work had been done and no amount had been disbursed, they prepared documents showing the- doing of that work and payment of that amount.
It would be no answer to that charge that after the matter had been reported to the higher authorities, the accused got the rectification work done. It would also be no answer to a charge of criminal misappropriation that the money.