Cheating Case in Bangladesh: Sections 406 and 420, Civil Disputes, Bail and Settlement in 2026

Cheating case in Bangladesh: the law in 2026

A cheating case in Bangladesh is a criminal prosecution under sections 415 to 420 of the Penal Code 1860, very often paired with criminal breach of trust under section 406. It is one of the most common weapons in commercial, property and family money disputes, because it brings the police and the criminal courts into what began as a deal. That is also its weakness. Bangladeshi law draws a clear line between a deception that induces someone to hand over money or property, which is a crime, and a promise that is honestly made and later broken, which is a breach of contract to be resolved in the civil courts.

This guide explains the offences, the elements the prosecution must prove, when a business dispute becomes criminal and when it stays civil, how cases start by FIR or complaint, bail and compoundability under Schedule II of the Code of Criminal Procedure, settlement under the 2026 amendments to section 345, quashing under section 561A, the interaction with cheque-dishonour cases under section 138 of the Negotiable Instruments Act, and how to recover money in the civil courts while a criminal case runs. It is written for both sides: those who have been cheated and those who have been accused.

Summary: Cheating requires deception and a fraudulent or dishonest inducement at the time property or consent is obtained. Simple cheating under section 417 carries up to one year; cheating that induces delivery of property or a valuable security under section 420 carries up to seven years and fine. Both are compoundable with the court's permission. A dispute that is purely contractual will not support a cheating case, but a pending civil suit does not by itself stop a criminal case where the ingredients of the offence are present.

Key point: The Penal Code itself draws the line between crime and contract: if a person intends to perform when obtaining the money and later breaks the contract, he does not cheat but is liable only to a civil action for breach of contract. Dishonest intention at the outset is what turns a failed deal into a cheating case.

At a glance

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Table of Contents

What a cheating case in Bangladesh involves

The offence of cheating is defined in section 415 of the Penal Code. A person cheats who, by deceiving any person, fraudulently or dishonestly induces the person deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces that person to do or omit to do anything which he would not do or omit if he were not deceived, where that act or omission causes or is likely to cause damage or harm in body, mind, reputation or property. A dishonest concealment of facts is itself a deception.[1]

Two definitions do much of the work. A person acts "dishonestly" when he intends to cause wrongful gain to one person or wrongful loss to another, and "fraudulently" when he acts with intent to defraud.[1] Every cheating case in Bangladesh therefore turns on the accused's state of mind when the victim parted with money or property.

The elements the prosecution must prove

• Deception: a false representation, or dishonest concealment of a fact, made to the complainant.
• Inducement: the deception induced the complainant to deliver property, allow property to be retained, or do or omit to do something.
• Fraudulent or dishonest intention: present at the time of the inducement, not formed later.
• Harm: for the second limb, damage or harm to body, mind, reputation or property, actual or likely.

The punishment scale

Simple cheating under section 417 is punishable with imprisonment of either description for up to one year, fine, or both. Cheating a person whose interests the offender was bound by law or contract to protect, under section 418, and cheating by personation, under section 419, each carry up to three years, fine, or both. Section 420, the most frequently charged provision, punishes cheating that dishonestly induces delivery of property, or the making, alteration or destruction of a valuable security, with up to seven years' imprisonment and fine.[1]

Criminal breach of trust under sections 405 and 406

Complaints in commercial disputes frequently cite sections 406 and 420 together. They are different offences. Under section 405, criminal breach of trust is committed by a person who, being entrusted with property or with dominion over it, dishonestly misappropriates or converts it to his own use, or dishonestly uses or disposes of it in violation of a legal direction or of a legal contract touching the trust. Section 406 punishes it with up to three years, fine, or both.[1]

Aggravated forms

The Code treats certain relationships more seriously. Criminal breach of trust by a carrier, wharfinger or warehouse-keeper, or by a clerk or servant, carries up to seven years and fine. Where the property is entrusted to a public servant, or to a banker, merchant, factor, broker, attorney or agent in the way of business, section 409 provides for imprisonment for life or up to ten years, and fine.[1]

Cheating or breach of trust?

The distinction lies in how the accused came to hold the property. In cheating, the property is obtained by deception from the start. In criminal breach of trust, it is lawfully entrusted and later dishonestly misused. A complaint that pleads both offences on the same facts should be read carefully: an allegation that money was obtained by a false promise and an allegation that the same money was honestly entrusted and later misappropriated point in different directions, and the tension often exposes the weakness of the case.

When a business dispute becomes a cheating case in Bangladesh

The single most important question in commercial cheating litigation is whether the dispute is criminal at all. The Penal Code answers it in its own illustrations to section 415.

The statutory dividing line

Illustration (g) describes a person who intentionally deceives another into believing that he will deliver indigo, which he does not intend to deliver, and so induces an advance of money: that person cheats. But if, when obtaining the money, he intended to deliver and later broke his contract, he does not cheat and is liable only to a civil action for breach of contract.[1] Illustration (f) makes the same point about loans: a person who obtains a loan by deceiving the lender into believing he means to repay, when he does not intend to repay, cheats.[1]

The test is therefore intention at inception. Non-payment, late delivery, defective goods or a failed project do not by themselves prove a dishonest intention when the deal was made. Evidence that does point to such intention includes false statements of existing fact, fabricated documents, fictitious identities, concealment of a prior sale or encumbrance, and conduct immediately after receipt of the money that is inconsistent with any intention to perform.

Typical patterns

• Land and flats: selling or mortgaging property already sold to someone else, without disclosure, is cheating by the Penal Code's own illustration (i).[1]
• Advance payments: taking advances for goods, jobs, visas or overseas employment with no intention of performing.
• False samples and marks: inducing a purchase by showing a false sample or counterfeit mark.[1]
• Investment schemes: raising money on false statements about returns, licences or assets.
• Payment instruments: paying with a bill or cheque on an account the payer knows will not honour it, while intending not to pay.[1]

Parallel civil and criminal proceedings

Accused persons often argue that a criminal case must stop because a civil suit is pending on the same facts. The Appellate Division has rejected that argument as a general rule.

In Mohammad Amir Ali Mostafa v Shah Md Nurul Alam it restored a cheating and forgery prosecution, holding that a civil suit between the same parties over the same property is not a bar to the criminal proceeding, which runs in its own way, and quoting earlier authority that there is no legal impediment to a criminal case on the same allegations provided the ingredients of the offence are present.[9] For any cheating case in Bangladesh, the decisive question is not whether a civil remedy exists, but whether the ingredients of cheating are alleged and supported.

Starting a cheating case: FIR or complaint

A cheating case in Bangladesh can begin in two ways, and the choice affects speed, control and the risk of arrest.

Cognizable and non-cognizable offences

Schedule II to the Code of Criminal Procedure classifies each offence. According to it, police may arrest without warrant for section 420, section 419 and section 406, but not for simple cheating under section 417 or for section 418.[3] For a cognizable offence, information given to the officer in charge of a police station is recorded under section 154 as a first information report. For a non-cognizable offence, the officer enters the substance of the information and refers the informant to a Magistrate.[2] Our guide to GDs and FIRs in Bangladesh explains the difference in practice.

The complaint route

Many commercial cheating cases are filed as complaints directly before a Magistrate. The Magistrate examines the complainant on oath under section 200, may postpone process and direct an inquiry or investigation under section 202, and may dismiss the complaint under section 203 if there is no sufficient ground for proceeding. If process issues, the summons or warrant may not be issued until a list of prosecution witnesses has been filed.[2] The complaint route gives the complainant more control over the narrative, but it also exposes the complainant to scrutiny from the start. Our guide on how to file a criminal case in Bangladesh covers drafting and filing.

Which court tries it

Under Schedule II, section 420 is triable by a Metropolitan Magistrate or a Magistrate of the first class, while sections 417, 418, 419 and 406 are triable by a Metropolitan Magistrate or a Magistrate of the first or second class.[3]

Bail and arrest in cheating cases

Bail status is set by Schedule II. Sections 417, 418, 419 and 420 are shown as bailable; section 406 is shown as not bailable.[3] For a bailable offence, section 496 requires a person who is prepared to give bail to be released on bail. For section 406, bail is discretionary under section 497, and section 498 allows the High Court Division or a Court of Session to grant bail and, since the 2026 amendment, allows any court releasing an accused on bail to impose reasonable and fair conditions to prevent abscondence or ensure good behaviour.[2] [4]

Where an FIR has been or is about to be lodged and arrest is a real risk, anticipatory bail from the High Court Division or a Court of Session is often the first defensive step. See our guide to anticipatory bail in Bangladesh.

Settlement and compounding

Because cheating cases usually concern money, most of them end in settlement. The Code of Criminal Procedure regulates how.

Compoundable with the court's permission

Section 345(2) lists offences that may be compounded with the permission of the court before which the prosecution is pending, by the person named in the table. Dishonest misappropriation under section 403, criminal breach of trust under sections 406, 407 and 408, and cheating under sections 417, 418, 419 and 420 are all in that list, with the person cheated or the owner of the property entitled to compound.[2] Composition has the effect of an acquittal, and the High Court Division or a Sessions Judge exercising revisional powers may also allow composition.[2]

Court-facilitated settlement since 2025

The Code of Criminal Procedure (Amendment) Act 2026 added section 345(8), effective from 10 August 2025. Where both parties agree to compound a compoundable case, the court may facilitate the process or refer it to the Legal Aid Officer, to the parties' advocates or to the parties themselves, and if satisfied that a lawful agreement has been executed it may keep the agreement on record and pass orders to implement its terms, provided third parties are not prejudiced.[2] [4] For complainants, this means a settlement involving instalments can now be structured with the court's oversight rather than relying on trust alone. Our note on compromise in criminal cases in Bangladesh explains the drafting points.

Settlement terms that protect both sides

A good settlement records the amount, the payment schedule, the consequences of default, the withdrawal or compounding of every related case, and the return of documents such as cheques, title deeds or share certificates. Where civil suits are also pending, the settlement should be recorded in each forum so that no proceeding survives by accident.

Defending a cheating case in Bangladesh

Defence strategy depends on the stage of the case and the strength of the documents. The best defences are usually built from the complainant's own papers.

Discharge at the charge stage

When the case reaches the court for trial, a Magistrate must discharge the accused under section 241A if, after considering the record and hearing both sides, the charge is groundless.[2] In a cheating case the application typically shows that the prosecution record discloses a contractual relationship, part performance or a commercial dispute over quality or price, with no material showing deception at inception. In one 2023 case, the High Court Division upheld a discharge where a CID inquiry had found the cheating and forgery allegations not prima facie proved and contemporaneous police material showed the dispute was really about dower money between two families.[13]

Quashing under section 561A

The High Court Division may quash a proceeding under its inherent power to prevent abuse of process or secure the ends of justice.[2] The settled grounds include cases where the allegations, even taken at face value and accepted in their entirety, do not constitute the offence alleged, and cases where the proceeding is an abuse of process.[11] A complaint that describes only a breach of contract, without any allegation of deception at the outset, fits the first ground.

Two limits apply. The accused should first seek discharge under section 241A before asking for quashing, because the Appellate Division has held that available remedies must be exhausted.[9] And the High Court Division will not assess evidence or decide disputed facts at that stage; that is the trial court's function.[12] Our analysis of section 561A quashment in Bangladesh explains how these principles are applied.

Counter-measures against false complaints

Where a Magistrate discharges or acquits in a case instituted on complaint or information and finds the accusation false and either frivolous or vexatious, section 250, as amended in 2026, requires the Magistrate to call on the complainant to show cause and to direct compensation of up to fifty thousand taka where satisfied.[2] [4] Complainants should weigh that risk before filing a criminal case to apply pressure in a civil dispute.

Cheque cases and cheating

A dishonoured cheque can give rise to two different criminal cases: an offence under section 138 of the Negotiable Instruments Act 1881, and, in some circumstances, cheating under the Penal Code.

The section 138 offence

Under section 138, a drawer whose cheque is returned unpaid for insufficient funds commits an offence punishable with imprisonment of up to one year, a fine of up to three times the cheque amount, or both, provided the cheque was presented within six months or its validity period, the payee gave written notice within thirty days of learning of the dishonour, and the drawer failed to pay within thirty days of receiving the notice.[5]

A complaint must be made in writing by the payee or holder in due course within one month of the cause of action. An appeal against a sentence requires a deposit of at least fifty per cent of the cheque amount, and the holder keeps the right to recover any unrealised balance through the civil court.[5]

The Negotiable Instruments (Amendment) Act 2026, Act No 65 of 2026 dated 10 April 2026, changed the forum: offences under section 138 involving a cheque with a face value above five lakh taka are tried by a Joint Sessions Judge or Metropolitan Joint Sessions Judge, and the rest by a Metropolitan Magistrate or Magistrate of the first class.[6] Our guides to cheque dishonour in Bangladesh, the cheque dishonour legal notice and security cheque cases cover the procedure in detail.

How the two offences differ

The Appellate Division has described the section 138 offence as a civil liability transformed into a criminal liability under restricted conditions, created by legal fiction rather than a natural crime.[10] No dishonest intention at inception is required: if the statutory conditions are met, the offence is complete. Cheating, by contrast, requires deception and dishonest intention.

The Penal Code's illustration (d) shows the overlap: a person who pays with a bill on a house where he keeps no money, expecting it to be dishonoured and intending not to pay, cheats.[1] A cheque given knowingly on an empty account to obtain goods may therefore support both cases, while a cheque given in good faith that later bounces supports only section 138.

Disputed cheque facts

In the same 2017 decision the Appellate Division held that whether a cheque was issued as security, as an advance or as a post-dated instrument is a disputed question of fact to be decided on evidence at trial, not on a quashing application, and that fraudulent insertion of a larger amount in a blank cheque is likewise a matter for trial.[10]

Recovering money in the civil courts

A criminal conviction punishes; it does not necessarily repay. Victims of cheating usually need a civil strategy alongside the criminal case, and the two can run in parallel.[9]

Money suits and limitation

The Limitation Act 1908 sets three-year periods for the most common claims: a suit for money lent runs from the date of the loan, a suit for money received by the defendant for the plaintiff's use runs from the date of receipt, and a suit for relief on the ground of fraud runs from the date the fraud becomes known to the person wronged.[8] A criminal case does not stop these periods from running, so the civil suit should be filed in time even if a settlement is being negotiated in the criminal court.

Summary suits and protective orders

Where the claim is on a bill of exchange, hundi or promissory note, Order XXXVII of the Code of Civil Procedure provides a summary procedure in the High Court Division and the District Court, under which the defendant may defend only with leave and a decree may be executed forthwith.[7] Order XXXVIII provides for attachment before judgment where a defendant may be required to furnish security for the production of property.[7] In serious fraud cases, an early application for attachment or injunction can be the difference between a paper judgment and actual recovery. Our guide to breach of contract in Bangladesh explains the civil remedies in more depth.

Fines and compensation in the criminal case

Section 545 of the Code of Criminal Procedure allows a criminal court that imposes a fine to order all or part of it to be paid as compensation for loss caused by the offence, where substantial compensation would be recoverable in a civil court.[2] That power is discretionary and limited to the fine actually recovered, so the criminal case should not be treated as a substitute for a civil claim. In cheque cases, any fine realised is paid to the holder up to the face value of the cheque.[5]

Evidence that decides cheating cases

Because intention is the core issue, cheating cases are won and lost on contemporaneous documents.

• The original representation: brochures, emails, messages, agreements and recorded statements made before the money moved.
• The money trail: bank transfers, receipts, cheques and account statements showing what was paid, to whom and when.
• Title and status documents: land records, prior deeds, company records and licences that show whether representations were true.
• Conduct after payment: steps taken, or not taken, to perform; disappearance, changed numbers or transfers of assets.
• Correspondence about the dispute: admissions, excuses and offers that show whether the problem was performance or deception.

For complainants, assembling this material before going to the police or the Magistrate is essential. For the accused, the same material often shows a genuine commercial relationship, part performance and a dispute over terms, which is the foundation of a discharge or quashing application.

Step-by-step: handling a cheating case in Bangladesh

Whether you are filing or defending, the sequence below reflects how we approach a cheating case in Bangladesh.

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Throughout, keep the civil and criminal tracks coordinated. A settlement in one forum should resolve every related proceeding, and a limitation date should never be lost while criminal negotiations continue.

Comparing the offences

The table summarises the main offences used in a cheating case in Bangladesh, based on the Penal Code and Schedule II. On a phone, scroll it sideways.

Classification matters at every stage: it decides whether police can arrest without warrant, whether bail is a right, which court tries the case and whether a settlement needs the court's permission.[3]

Common mistakes

• Criminalising a contract dispute: a complaint that alleges only non-payment or non-performance invites discharge, quashing and possibly compensation under section 250.
• Pleading inconsistent offences: alleging both deception at inception and honest entrustment on the same facts weakens both.
• Neglecting the civil claim: limitation runs regardless of the criminal case.[8]
• Skipping discharge: going straight to the High Court Division before seeking discharge risks dismissal of a quashing application.[9]
• Informal settlements: unrecorded payment promises are easily broken; section 345(8) now allows the court to keep and implement the agreement.[2]
• Losing the documents: intention is proved by paper; screenshots without context and missing bank records undermine either side.

Strategy in 2026

The 2026 amendments make a cheating case in Bangladesh a more balanced instrument. Court-supervised settlement under section 345(8) gives complainants a credible route to repayment, while mandatory consideration of compensation under section 250 raises the cost of false complaints.[2] [4] The cheque-forum change in the Negotiable Instruments (Amendment) Act 2026 also affects where related cheque cases are heard.[6]

For complainants, the priority is evidence of deception at inception and a parallel civil claim filed in time. For the accused, it is an early, document-based case that the dispute is commercial, followed by discharge and, if necessary, quashing. TRW's white-collar defence and investigations practice and commercial litigation team act on both sides. Our overview of white-collar crime in Bangladesh places cheating in the wider fraud landscape. To discuss a cheating case in Bangladesh, contact TRW.

Frequently asked questions

What is the punishment for cheating in Bangladesh?

Up to one year, fine, or both for simple cheating under section 417, and up to seven years and fine under section 420 where the cheating induces delivery of property or a valuable security.[1]

Is section 420 bailable in Bangladesh?

Schedule II to the Code of Criminal Procedure shows section 420 as cognizable and bailable, triable by a Metropolitan Magistrate or Magistrate of the first class.[3]

Is criminal breach of trust bailable?

Schedule II shows section 406 as cognizable and not bailable, so bail is at the court's discretion.[3]

Can a cheating case be compromised?

Yes. Sections 417 to 420 and 406 are compoundable with the permission of the court, and composition has the effect of an acquittal. Since 2025, section 345(8) also lets the court facilitate and implement a settlement.[2]

When is a business dispute not cheating?

When the person intended to perform at the time of receiving the money and later failed. The Penal Code says such a person does not cheat and is liable only to a civil action for breach of contract.[1]

Does a pending civil suit stop a cheating case?

Not by itself. The Appellate Division has held that a civil suit on the same facts is no bar to a criminal case where the ingredients of the offence are present.[9]

Can a cheating case be quashed?

Yes, under section 561A, for example where the allegations taken at face value do not constitute cheating. The accused should usually seek discharge first, and the High Court Division will not decide disputed facts.[9] [11] [12]

Can a bounced cheque be both a section 138 case and cheating?

It can, where the cheque was given knowing it would not be honoured and with intent not to pay. A cheque given in good faith that later bounces supports only section 138.[1] [10]

How long do I have to sue for my money?

Generally three years: from the loan for money lent, from receipt for money received for your use, and from discovery for relief on the ground of fraud.[8]

What if the cheating case against me is false?

Seek discharge or quashing, and if a Magistrate discharges or acquits you and finds the accusation false and frivolous or vexatious, section 250 requires the court to consider compensation of up to fifty thousand taka.[2]