BNS Section 321: Fraudulently Preventing a Debt Being Available for Creditors (IPC 422 Mapping) (2026)

Explainer · Criminal Law · BNS

Updated for 2026 · Claw Editorial

Section 321 of the Bharatiya Nyaya Sanhita (BNS) punishes a person who dishonestly or fraudulently prevents a debt from being made available, under the law, to pay their creditors. The BNS is the new criminal code in force since 1 July 2024, and Section 321 replaced Section 422 of the Indian Penal Code (IPC). The punishment is imprisonment up to two years, or a fine, or both. Note the common mix-up: the definition of mischief is not Section 321, it is Section 324 of the BNS. This explainer sets out what Section 321 actually covers, how it maps to the old law, the punishment, and what changed. Last verified October 2026.

01Why the section number matters now

Since 1 July 2024, the Indian Penal Code (IPC) is replaced by the Bharatiya Nyaya Sanhita, 2023 (BNS). The offences about fraudulent deeds and dispositions of property, which ran through Sections 421 to 424 of the IPC, are renumbered in the BNS. Dishonestly or fraudulently preventing a debt being available to creditors, earlier Section 422 of the IPC, is now Section 321 of the BNS.

There is a mix-up to clear up at the start. Many look up "Section 321" expecting the definition of mischief. Under the BNS, mischief is defined in Section 324, not Section 321. So confirm the code and the offence name before you cite the number.

02What Section 321 covers

Section 321 of the BNS punishes a person who dishonestly or fraudulently prevents a debt or demand, due to that person or to any other person, from being made available, according to law, for payment of that person's debts.

In plain terms, it targets a debtor who hides or diverts a debt owed to them so that it cannot be reached to pay what they themselves owe. It is a fraud on creditors, achieved by keeping an asset, a debt receivable, out of their lawful reach.

03Key ingredients

The prosecution must prove each of these:

• there was a debt or demand due to the accused or to another person;
• that debt or demand was one that, under the law, could be made available to pay the accused's debts;
• the accused prevented it from being so made available;
• the accused did so dishonestly or fraudulently.

The dishonest or fraudulent intent is the heart of the offence. A genuine commercial decision about a debt, without intent to defraud creditors, does not attract this section. The aim is to catch deliberate steps to put an asset beyond the reach of creditors.

04Old to new: IPC 422 to BNS 321

Section 422 of the IPC is now Section 321 of the BNS. The ingredients and the punishment are carried over.

Because the substance is carried over, judgments on Section 422 of the IPC still guide how Section 321 is read.

05Punishment and classification

The punishment under Section 321 is imprisonment of either description for a term which may extend to two years, or a fine, or both.

On classification, the offence under Section 321 is:

• Non-cognizable: the police generally need an order of a Magistrate to investigate.
• Bailable: bail is a matter of right, subject to conditions.
• Triable by any Magistrate.

06What changed from the old law

For this offence, the change is mostly the number. The ingredients, the dishonest or fraudulent intent, and the two-year ceiling are carried over from Section 422 of the IPC, so older precedents still apply.

The main practical point is to avoid the "mischief" mix-up. The definition of mischief is Section 324 of the BNS, which was Section 425 of the IPC. Section 321 is the specific creditor-fraud offence about preventing a debt being available. Map the offence by its name, not just its number.

07Where Claw fits

Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.

Creditor-fraud cases turn on proof of dishonest or fraudulent intent, and on how courts read the old Section 422 of the IPC, which now guides Section 321. With Claw you can look up how benches have treated this creditor offence, then keep a live matter in view by party or advocate name. The research base runs to more than 30 crore judgments, with reported decisions reaching back to the Supreme Court in 1950 and the High Courts in 1990, and a typical query returns in well under five seconds. Case records, orders and hearing dates are drawn together across 9,102 courts, benches and forums.

Your uploaded case files are never used to train Claw's AI models. Open a free Claw account to follow a Section 321 matter by party or advocate name, or trace the earlier Section 422 rulings behind it. For the wider body of law, see case search across Indian courts.

08Sources and further reading

• India Code (official text of the BNS, 2023): indiacode.nic.in
• PRS Legislative Research (BNS overview and IPC comparison): prsindia.org
• Section 321, BNS (bare text): devgan.in
• Claw: clawlaw.in

This explainer is general information, not legal advice. The law changes through amendments and judgments, so check the current text and take advice from counsel before you act.

09Frequently asked questions