Failure to Repay a Loan Does Not Constitute Cheating; High Court Sets Aside Criminal Conviction

Man convicted over failure to repay Tk 4 lakh loan acquitted as High Court finds dispute to be civil in nature.

Failure to repay a loan does not, by itself, constitute the criminal offence of cheating under Section 420 of the Penal Code. Unless fraudulent or dishonest intention at the inception of the transaction is established, a person cannot be convicted of cheating merely for failing to return borrowed money. The High Court has made these observations while acquitting a man who had been convicted over allegations of failing to repay a loan of Tk 4 lakh.

Justice Md. Salim delivered the judgment on July 6, 2026, in Criminal Revision No. 6587 of 2024, Jahor Miah vs The State and Another. The High Court set aside the conviction and sentence imposed by the lower courts in Brahmanbaria and acquitted the accused, Jahor Miah. The judgment was published on the Supreme Court website on October 11, 2026.

Background of the Case:

According to the complaint, the accused persons borrowed Tk 4 lakh from the complainant, Shayesta Begum, on August 1, 2017, to construct a dwelling house. They allegedly promised to repay the amount within one year but failed to do so after the stipulated period expired. Despite an attempt to resolve the matter through a local arbitration, the money was not returned, prompting the complainant to initiate legal proceedings.

The complaint invoked Sections 406, 420 and 109 of the Penal Code. Subsequently, the trial court convicted Jahor Miah under Section 420 of the Penal Code and sentenced him to one year's rigorous imprisonment and a fine of Tk 5,000, with an additional one month's simple imprisonment in default of payment.

On April 24, 2024, the Additional Sessions Judge, First Court, Brahmanbaria, dismissed the appeal and upheld the trial court's judgment. The accused then filed a criminal revision before the High Court challenging the conviction and sentence.

Arguments of the Parties:

Counsel for the accused argued that the dispute arose from an ordinary loan transaction and was essentially civil in nature. The prosecution had failed to establish that the accused possessed a fraudulent or dishonest intention to deceive the complainant when the loan was obtained. Mere failure to repay the borrowed amount, counsel submitted, was insufficient to establish an offence under Section 420 of the Penal Code.

On the other hand, counsel for the complainant argued that the money had been obtained through false assurances and that the accused had acted with dishonest intent from the outset. The State supported the complainant's submissions and sought dismissal of the Rule and affirmation of the lower courts' decisions.

High Court's Observations:

Upon examining the testimony of the witnesses, their cross-examinations and the other materials on record, the High Court found that the central allegation concerned the borrowing of Tk 4 lakh and the subsequent failure to repay it.

The Court observed that establishing the offence of cheating, as described in Section 415 of the Penal Code, requires an allegation and evidentiary basis demonstrating fraudulent or dishonest intention at the inception of the transaction. Although such intention may be inferred from the surrounding circumstances, it must be supported by the evidence.

The Court further held that a dispute arising from an ordinary financial transaction between parties does not automatically attract the offence punishable under Section 420 of the Penal Code.

In reaching this conclusion, the High Court relied on the Appellate Division's decision in *M. A. Sukkur vs Md. Zahirul Haque*, reported in 23 BLT (AD) 76. The decision supports the principle that an ordinary financial transaction between a debtor and a creditor does not, by itself, fall within the scope of a criminal offence.

Lower Courts' Decisions Set Aside:

The High Court concluded that, considering the facts, evidence and nature of the dispute, the matter was essentially one of civil liability rather than criminal wrongdoing.

It found that both the trial court and the appellate court had failed to properly appreciate the evidence and apply the relevant legal principles. Consequently, the conviction and sentence were found to be unsustainable due to misappreciation of evidence and misapplication of the law.

The Court also observed that the complainant remained at liberty to seek appropriate relief before the competent civil court, provided such relief was otherwise maintainable under the law.

High Court's Judgment:

The High Court made the Rule absolute and set aside the appellate judgment dated April 24, 2024, as well as the trial court's judgment and order of conviction and sentence dated March 21, 2022.

Accordingly, Jahor Miah was acquitted of the charges and discharged from his bail bonds.

Case details: Criminal Revision No. 6587 of 2024, Jahor Miah vs The State and Another.

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