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Bharatiya Nyaya Sanhita, 2023 Chapter XVII · Of Offences Against Property
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Bharatiya Nyaya Sanhita, 2023 — Section 321

Dishonestly or Fraudulently Preventing Debt Being Available for Creditors

Section 321 punishes a person who dishonestly or fraudulently prevents any debt or demand due to himself, or to any other person, from being made available according to law for payment of his debts or the debts of that other person. The punishment is imprisonment of up to two years, or fine, or both. The section is word for word the same as IPC Section 422.

Please note: This page reflects our understanding of the law as of the date it was last reviewed. Parliament, the State Legislatures, and the courts continue to amend and interpret this law, and this page may not yet reflect the most recent change. Please verify the current text of the law independently, and consult a licensed advocate for advice on your own matter, before relying on this page.

Corresponding Provision Under Prior Law

Verified against the National Crime Records Bureau's official BNS–IPC concordance (Sankalan Portal) and cross-checked directly against the bare text of both Acts. Section 321 carries no “Change” marker in the concordance and corresponds to one section of the old Indian Penal Code, 1860 (Section 422). Comparing the two statutory texts, the wording is identical, and Lexovia classes the section as Exact:

BNS sectionIPC, 1860 equivalentCategory
321S.422 “Dishonestly or fraudulently preventing debt being available for creditors”Exact

A word-by-word comparison of BNS Section 321 with IPC Section 422 shows no difference: the offence (dishonestly or fraudulently preventing any debt or demand due to himself or to any other person from being made available according to law for payment of his debts or the debts of such other person) and the punishment (imprisonment of either description for a term which may extend to two years, or fine, or both) are the same in both Acts. The marginal heading is also the same, and the concordance carries no Change marker for this section.

Quick Reference

Sourced from the First Schedule to the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) and Section 359 of the BNSS. Section 321 has a single row in the Schedule.

Punishment (First Schedule wording): “Imprisonment for 2 years, or fine, or both.” The statute’s own clause fixes the maximum term ("a term which may extend to two years").
Non-cognizable · Bailable · compoundable by the creditors who are affected thereby, without the permission of the Court (BNSS Section 359(1)) · triable by any Magistrate.

Statutory Text (Verbatim)

Whoever dishonestly or fraudulently prevents any debt or demand due to himself or to any other person from being made available according to law for payment of his debts or the debts of such other person, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both.

Source: Bharatiya Nyaya Sanhita, 2023 (Act No. 45 of 2023), as published in the Gazette of India Extraordinary.

Explanation & Illustration (Lexovia's Commentary — Not Statutory Text)

The offence as a whole

Explanation (Lexovia's Commentary)

Section 321 is concerned with money or claims owed to someone, rather than with physical property. The ingredients are these. First, the accused must act dishonestly or fraudulently, as those words are defined in Section 2(7) (intention of causing wrongful gain to one person or wrongful loss to another) and Section 2(9) (intention to defraud). Second, the accused must prevent a debt or demand due to himself or to any other person. Third, the effect must be that the debt or demand is prevented from being made available according to law. Fourth, the purpose is payment of his debts or the debts of such other person. The section is worded in parallel: a debt or demand due “to himself” is paired with “his debts”, and one due to “any other person” with “the debts of such other person”; the words “such other person” point to the debts of that other person. Section 2 does not define “debt”, “demand” or “creditors”.

The section names only one act — “prevents” — and does not list the ways in which a debt or demand may be kept from being available. It also does not name the legal route through which a debt is made available for payment of debts; it says only “according to law”. Unlike Section 320, it contains no separate limb about intention or knowledge of the effect on creditors: the dishonest or fraudulent state of mind attaches directly to the act of preventing, and the reference to payment of debts reads as describing what the debt or demand would otherwise be available for.

It is useful to place Section 321 beside its neighbours. Section 320 deals with property that is removed, concealed, delivered or transferred without adequate consideration, with a stated intention or knowledge about distribution among creditors; Section 321 deals with a debt or demand and uses the single verb “prevents”. Section 323, in its last limb, punishes a person who dishonestly releases a demand or claim to which he is entitled; Section 321 does not use the word “release”, and its wording is about preventing a debt or demand from being made available. Section 322 concerns deeds of transfer containing false statements. Where a debt is redirected so that money ends up with someone else, the facts may also be looked at under Section 320; the wording of the two sections does not itself say how they are to be reconciled where facts touch both, and a reader with an actual matter should take advice.

The punishment is imprisonment of either description (rigorous or simple, as listed in Section 4(c)) for a term which may extend to two years, or fine, or both, with no minimum term; that is the same as IPC Section 422. Under the BNSS First Schedule the offence is non-cognizable (BNSS Section 2(1)(o): a police officer has no authority to arrest without warrant), bailable, and triable by any Magistrate. Under BNSS Section 359(1) it is compoundable by the creditors who are affected, without the permission of the Court; Section 359 sets further conditions on compounding that should be read in full before it is relied on in any real case.

Illustration (Lexovia's Own Example)
Sunita is owed ₹8 lakh by a client, Harish Traders, payable next month. She herself owes ₹12 lakh to a supplier, who has said he will take legal steps to recover it. Knowing that the client’s payment is the money from which her supplier would be paid, Sunita instructs Harish Traders to pay the ₹8 lakh, when it falls due, into the bank account of her cousin instead of her own, and the cousin keeps it for her. Her purpose is to make sure the money is not available to her supplier. She has dishonestly or fraudulently prevented a debt due to herself from being made available according to law for payment of her debts — the offence in Section 321, punishable with imprisonment of up to two years, or fine, or both. Sunita has not given up her claim against Harish Traders; the payment has only been redirected, so this is not a case of releasing a claim under Section 323. Because the money is redirected to the cousin, a reader may also wish to look at Section 320, which deals with delivering or transferring property; this page does not decide whether Section 320 also applies to the money once it has been paid, and which section fits depends on the facts of the case.
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Related / Cross-Referenced Sections

FAQs

What is the punishment under BNS Section 321?

Imprisonment of either description (simple or rigorous) for a term which may extend to two years, or fine, or both. The section sets no minimum term.

Is Section 321 bailable, and which court tries it?

Under the First Schedule to the BNSS it is non-cognizable and bailable, and triable by any Magistrate. Under BNSS Section 359(1) it is compoundable by the creditors who are affected, without the permission of the Court, subject to the other conditions of Section 359.

Does the debt have to be owed to the accused?

No. The section covers a debt or demand due “to himself or to any other person”; where it is due to another person, the words “such other person” point to the debts of that other person.

How is Section 321 different from Section 320?

Section 320 concerns property that is removed, concealed, delivered or transferred without adequate consideration, with an intention or knowledge about distribution among creditors. Section 321 concerns a debt or demand due to someone and punishes dishonestly or fraudulently preventing it from being made available for payment of debts.

Has anything changed from IPC Section 422?

No. A word-by-word comparison shows the wording and the punishment are identical.

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