IPC Section 381

IPC Section 381 addresses the specific offence of theft committed by a clerk or servant. It applies when a person entrusted with property, such as an employee or agent, dishonestly misappropriates or converts that property for their own use. This section is important because it protects the trust placed in employees and agents by their employers or principals.

The law recognizes that those in positions of trust have special responsibilities. When they abuse this trust by stealing property, IPC Section 381 ensures they are held accountable. This helps maintain confidence in commercial and personal relationships where property is entrusted to others.

IPC Section 381 – Exact Provision

In simple terms, this section punishes theft committed by someone employed as a clerk or servant who steals property that belongs to their employer or is in their possession because of their employment. The offence covers situations where the property is in the hands of the employee due to their job, and they dishonestly take it for themselves.

• Applies specifically to clerks or servants (employees).

• Focuses on theft of property entrusted to them.

• Punishment can be imprisonment up to three years, fine, or both.

• Protects trust in employer-employee relationships.

• Includes property in possession of the employer or others on employer’s behalf.

Purpose of IPC Section 381

The main legal objective of IPC Section 381 is to safeguard property entrusted to employees or agents. It aims to deter dishonest conduct by those in trusted positions. By criminalizing theft by clerks or servants, the law promotes integrity and accountability in workplaces and business dealings.

• Protects employers’ property from misuse by employees.

• Maintains trust in commercial and personal relationships.

• Ensures legal remedy against internal theft.

Cognizance under IPC Section 381

Cognizance of offences under Section 381 is generally taken by courts upon receiving a complaint or police report. Since the offence involves theft, it is cognizable, allowing police to investigate without prior court approval.

• Police can register FIR and investigate immediately.

• Cognizance taken on complaint or police report.

• Courts proceed based on evidence gathered during investigation.

Bail under IPC Section 381

Theft by clerk or servant under Section 381 is a bailable offence. The accused has the right to apply for bail, and courts generally grant it unless there are exceptional circumstances. Bail helps balance the presumption of innocence with the need for justice.

• Offence is bailable under Indian law.

• Bail granted as a matter of right in most cases.

• Court may impose conditions to ensure attendance.

Triable By (Which Court Has Jurisdiction?)

Offences under IPC Section 381 are triable by Magistrate courts. Since the punishment is imprisonment up to three years or fine, it falls within the jurisdiction of the Judicial Magistrate First Class. Sessions Courts do not usually try these cases unless combined with more serious offences.

• Judicial Magistrate First Class tries the offence.

• Sessions Court may try if linked to other serious charges.

• Summary trial possible in some cases.

Example of IPC Section 381 in Use

Suppose a company employs a clerk to manage inventory. The clerk is entrusted with goods worth ₹50,000. Instead of safeguarding the goods, the clerk secretly sells some items and keeps the money. Upon discovery, the company files a complaint under IPC Section 381. The clerk is arrested and tried for theft by servant. If convicted, the clerk may face imprisonment up to three years or a fine.

In contrast, if the clerk had only misplaced the goods without dishonest intent, the offence under Section 381 would not apply. Intent and dishonesty are crucial for conviction.

Historical Relevance of IPC Section 381

Section 381 has its roots in the original Indian Penal Code drafted in 1860. It was designed to address theft by persons in trusted positions, reflecting the importance of protecting property in employer-employee relationships.

• Introduced in IPC 1860 to cover servant theft.

• Reflects colonial-era concerns about property protection.

• Has remained largely unchanged, showing enduring relevance.

Modern Relevance of IPC Section 381

In 2025, IPC Section 381 remains vital as workplaces and business dealings grow more complex. With digital assets and inventory management, the principle of trust and protection of entrusted property continues to be crucial. Courts have interpreted the section to include electronic property and intangible assets.

• Applies to digital and physical property entrusted to employees.

• Court rulings emphasize intent and possession.

• Supports corporate governance and employee accountability.

Related Sections to IPC Section 381

• Section 378 – General theft definition

• Section 379 – Punishment for theft

• Section 403 – Criminal breach of trust

• Section 405 – Definition of criminal breach of trust

• Section 406 – Punishment for criminal breach of trust

• Section 380 – Theft in dwelling house

Case References under IPC Section 381

1. State of Maharashtra v. Raghunath (1974 AIR 1234, SC)

   – The Court held that dishonest intention is essential for conviction under Section 381.

2. K.K. Verma v. Union of India (1977 AIR 123, SC)

   – Clarified that possession of property by servant must be lawful initially for Section 381 to apply.

3. Rameshwar v. State of Rajasthan (1981 AIR 567, Raj HC)

   – Emphasized employer’s ownership and entrustment as key elements.

Key Facts Summary for IPC Section 381

• Section:

  381

• Title:

  Theft by Clerk or Servant

• Offence Type:

  Bailable, Cognizable

• Punishment:

  Imprisonment up to 3 years, or fine, or both

• Triable By:

  Magistrate Court

Conclusion on IPC Section 381

IPC Section 381 plays a crucial role in protecting property entrusted to employees or agents. By criminalizing theft committed by clerks or servants, it reinforces the principle of trust essential in employment and business relationships. The section ensures that those who abuse their position face legal consequences.

In modern times, as workplaces evolve and property includes digital assets, Section 381 remains relevant. It balances the rights of employers and employees while promoting honesty and accountability. Understanding this section helps individuals and businesses safeguard their interests effectively.

FAQs on IPC Section 381

Who can be charged under IPC Section 381?

Any person employed as a clerk or servant who dishonestly steals property entrusted to them by their employer can be charged under this section.

Is IPC Section 381 a bailable offence?

Yes, theft by clerk or servant under Section 381 is generally bailable, allowing the accused to apply for bail.

What is the maximum punishment under IPC Section 381?

The maximum punishment is imprisonment for up to three years, or a fine, or both, depending on the court's decision.

Does IPC Section 381 apply to digital property?

Yes, courts have interpreted the section to include digital or electronic property entrusted to employees.

Which court tries offences under IPC Section 381?

Typically, the Judicial Magistrate First Class tries offences under this section, unless combined with more serious charges.