WRONGFUL LOSS AND WRONGFUL GAIN UNDER IPC
Section 23 of the Indian Penal Code describes the wrongful act. A wrongful act means a mistake, activity, exclusion, or distortion that happens in any act and this is regarded as a violation in law mainly in Civil law this is the Layman’s definition of the wrongful act but as it is a lawful article, it must also have some legalized definition. So, the legal definition of the wrongful act signifies any ostensible or real negligent act, error, or omission, in the furnishing of or failure to provide any professional services by a guarantee to or for the client exclusively, in his capacity as accident and a health insurance agent, an authorized life, etc. this section not only speaks about the wrongful act but also discusses wrongful loss.
Wrongful loss is the mislaying that occurs by illegal or unlawful means of property to which the person losing it is lawfully qualified. An individual is considered to lose wrongfully when such an individual is unlawfully kept out of any property and in addition when such a person is wrongfully disadvantaged of his property.
This section furthermore talks about wrongful gain. Wrongful gain. Wrongful gain is the obtaining of property by illegal means and which the individual is gaining is not lawfully authorized. A person is assured to acquire or gain wrongfully when such an individual retains wrongfully.
SECTION 23 defines wrongful gain and wrongful loss as follows
“Wrongful gain”- “wrongful gain” is gain by unlawful means of property to which the person gaining is not legally entitled.
“Wrongful loss”- “Wrongful loss” is the loss by unlawful means of property to which the person losing it is legally entitled.
Gaining wrongfully: Losing wrongfully- A person is said to gain wrongfully when such person retains wrongfully, as well as when such person acquires wrongfully. A person is said to lose wrongfully when such person is wrongfully kept out of any property, as well as when such person is wrongfully deprived of property.
The word ‘wrongful’ is not defined, though ‘illegal’ is defined in Section 43 of the Code. ‘wrongful’ means prejudicially affecting a party in some legal right. The gain or loss to be wrongful within the meaning of this section must be caused by unlawful means. The means are said to be unlawful when they render liable to an action or prosecution.
“Wrongful Gain” implies:
- Gain of some property;
- The property to which a person was not legally entitled; and
- Gain must be by unlawful means.
Wrongful gain means acquiring wrongfully as well as retaining wrongfully. It means not only taking another’s property wrongfully but includes retaining the property wrongfully where the taking of it was not wrongful.
Similarly, “Wrongful Loss” means:
- Loss of some property;
- The property to which the person losing was legally entitled; and
- Loss must have been caused by unlawful means.
Wrongful loss means illegally depriving a person of his property and includes illegally keeping a person out of his property. For either wrongful gain or loss, the owner must lose his property or must be wrongfully kept out of it.
Wrongfully kept out of the property
Keeping wrongfully out of any property means keeping the owner out of possession of his property with the object of depriving him of the benefit arising from the possession, even temporarily. Where the owner is kept out of possession temporarily not to deprive him of the benefit to the property but with the object of causing him trouble or mental anxiety and with the ultimate intention of restoring the property to him, without expecting any recompense, it may not amount to causing wrongful loss. ‘A’ removed the box of his master and left it concealed in the cow shed to give a lesson to his master, it was held that no theft of the box was committed as there was no wrongful loss. Fees payable to a college for attending lectures are ‘property’ within the meaning of this section.
Wrongful gain – in Mahalingayya Pujari, a postman signed the postal receipts of V.P. Parcel himself to make it appear that they were received by the addressee and retained the parcel himself, it was held that retention of the parcel was wrongful gain because the postman was bound to return the undelivered parcels to the postmaster.
Wrongful loss – In Narasimhulu Vs. Nagur Sahib, the accused demolished a private structure because it was an encroachment on a public street. It was held that, as the accused had no justification in law to demolish the structure, their acts amounted to causing wrongful loss and they were guilty of mischief.
Section 24 – “Dishonestly”
Whoever does anything to cause wrongful gain to one person or wrongful loss to another person, is said to do that thing “dishonestly”.
The term “dishonestly” is not used in this section in its popular significance, as it need not always involve an element of fraud or deceit. So that an act may be said to have been done dishonestly under the code wrongful gain to one and wrongful loss to another is necessary; ‘wrongful gain’ and ‘wrongful loss’ are defined in section 23 of the Code. Therefore, this section has to be understood in conjunction with section 23. A thing doesn’t need to be done dishonestly there should be an intention to cause both ‘wrongful gain’ and ‘wrongful loss’, and the intention to cause wrongful loss would be sufficient. A person can be said to have a dishonest intention if in taking the property he intends to cause gain by unlawful means of the property to which the person so gaining is not legally entitled or to cause loss by wrongful means of property which the person so losing is entitled. An actual intention to convert an illegal or doubtful claim into a legal one makes an action dishonest. In Krishna Rao, ‘A’, entitled to possession of his house from B, sued B for arrears of rent basing his claim on a rent note which was found to be not genuine. A was not entitled to rent at a rate fixed by rent note. A had an intention to cause wrongful gain and therefore, the claim was held to have been made dishonestly.
Section 25- “Fraudulently”
A person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise.
To determine whether an act was done dishonestly under section 24 or fraudulently under section 25, the intention with which an act is done is very important. An act is done fraudulently if it is done to defraud.
Intent to defraud – The words ‘fraud’ and ‘defraud is not defined in the code. The meaning of ‘defraud has to be determined concerning the context in which the word fraudulently is found because it may or may not imply deprivation of property. Fraudulently as part of the definition of a crime implies the following elements:
- Deceit or an intention to deceive or in some cases mere secrecy; and
- Either actual injury or possible injury or an intent to expose some person either to actual injury or to a risk of possible injury using that deceit or secrecy.
The injurious deception is usually intended only as a means to an end. In determining whether the deception was fraudulent or not the question is:
Did the author of the deceit derive any advantage from it that he could not have had if the truth had been known: if so, it is hardly possible that advantage should not have had an equivalent in loss or risk of loss, to someone else; and if so, there was a fraud.
Fraudulently does not include the element of actual loss to any member of the community. It would be enough that the accused had aimed at an advantage by the deception, such advantage is always regarded as having an equivalent in loss or risk of loss to some other member or members of the community.
The word ‘defraud’ implies two elements: i) deceit and (ii) injury to the person deceived. Injury may not necessarily be some pecuniary loss to the person deceived. It may be even non-economic or non-pecuniary loss. In Dr. Vimla, the Supreme Court held that even in those rare cases where the benefit to the deceiver does not cause corresponding loss to the deceived, the second condition is satisfied. If there is an intention to deceive and use deceit to obtain an advantage, there is fraud. The intention to deceive may be from any expectation of advantage to the party himself or ill will towards the other. A general intention to defraud, without the intention of causing wrongful gain to one person or wrongful loss to another, is sufficient to support a conviction. To prove an intent to defraud, it is not necessary that some person should have been defrauded or there should be some who might have been defrauded. A man may have an intention to defraud, and yet there may not be any person who was or could be defrauded by his act. B has no account in Bank but A supposes that B has one. A on that supposition forges B’s name. it was held that ‘A’ had an intention to defraud, it is not necessary that some person should have been defrauded because B had no account in the Bank. B’s friend A forges B’s name on a cheque either to try his credit or to imitate his handwriting. In this case, there would be no intention on the part of ‘a’ to defraud although there was a party who might be defrauded. In Surendra Nath Ghosh, the accused after the execution and registration of a document, which was not required by law to be attested, added his name to the document as an attesting witness, it was held that he was not guilty of forgery because his act was neither fraudulent nor dishonest.
The distinction between fraudulently and dishonestly
- “Dishonestly” does not require deception or concealment as its ingredients; while deception or concealment is an ingredient of “fraudulently”.
- “Dishonestly” requires an intention to cause wrongful loss or wrongful gain of property. “Fraudulently” does not require such an intention. There can be fraud even though there is no intention to cause pecuniary loss or damage to the person deceived.
So, in this section, it needs deception of any person as well as in the situation of one who fraudulently, or dishonestly persuades another person to convey any property or is too bothered that any person has to keep any property similarly, in the keys of one who deliberately convince the person to do or acknowledge to do anything which he would not do or acknowledge if he was not so defrauded. As a result, deception of any person is a prime- factor.
This element has essentially therefore to be accepted in the explanation of the section dishonest concealment of fact, deception within the definition of this section. Consequently, the accomplishment has to prove dishonest concealment of fact, what is this honesty is too explained in section 24 of the Indian Penal Code, anybody who does whatever to cause the wrongful game to one person or illegal laws to another individual said to that thing honestly wrongful game and illegally laws are also interpreted in Section 23 of Indian Penal Code, the wrongful gain is gain by unethical or illegal means of property with the individual gaming is not lawfully sanctioned.
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AUTHOR: Adithya Narayanan,
5 Yr BBA-LLB, SDM Law College,