Banking Litigation & Financial Disputes

Cheque Bounce, Money Misappropriation & Money Recovery in Bangladesh

Legal remedies for dishonoured cheques, fraudulent misappropriation of funds, criminal breach of trust, cheating and civil recovery of outstanding money under the laws of Bangladesh.

Depending on the facts of a dispute, a claimant may consider a complaint under the Negotiable Instruments Act, 1881, a criminal complaint under the Penal Code, 1860, or a civil proceeding for recovery of the outstanding amount.

1. Overview of Legal Remedies for Money Recovery

In Bangladesh, the legal framework for recovering money and addressing offences related to dishonoured cheques and misappropriation of funds involves specific statutory remedies across both criminal and civil law.

Criminal proceedings may result in punishment where the elements of an offence are established. Civil proceedings, by contrast, are directed towards obtaining an enforceable decree for payment of the money due. Depending on the facts, more than one legally available remedy may require consideration.

Dishonoured Cheque

Primarily governed by Chapter XVII of the Negotiable Instruments Act, 1881, including Section 138. The statutory procedure includes cheque presentation, bank dishonour, demand notice and a complaint within the prescribed time.

Misappropriation or Fraud

Depending on the evidence and the elements of the alleged offence, relevant provisions of the Penal Code, 1860 may include Sections 403, 406 and 420.

Civil Money Recovery

A money suit may be brought in a competent civil court to seek a decree for outstanding money, subject to the applicable jurisdiction, limitation period and evidentiary requirements.

Execution of a Decree

Where a court grants a money decree and the judgment debtor does not satisfy it, the decree-holder may seek execution in accordance with the applicable procedural law.

2. Dishonour of Cheque — Cheque Bounce Cases

Cheque dishonour is governed primarily by Chapter XVII of the Negotiable Instruments Act, 1881 (NI Act). Section 138 addresses specified circumstances in which a cheque is dishonoured and the statutory requirements for criminal liability.

A Section 138 case is subject to mandatory procedural requirements. The claimant should preserve the original cheque, the bank's dishonour advice, proof of the date of receipt of that advice, the legal demand notice and evidence of service.

Critical point: The date of cheque presentation, the date the bank dishonour information is received, the date the demand notice is served and the date the payment period expires can each affect the statutory calculation. Record each date carefully.

3. Section 138: Statutory Requirements and Procedure

Step 1 — Present the Cheque to the Bank

Present the cheque within six months from its date or within its validity period, whichever is earlier, as applicable under the statute and banking rules.

Keep the cheque details and the bank's presentation records.
Step 2 — Obtain the Bank Dishonour Slip

If the bank returns the cheque unpaid, obtain the formal dishonour slip, return memo or other relevant bank advice identifying the reason for non-payment.

Reasons may include insufficient funds, a closed account or stop-payment instructions. Whether a particular reason falls within Section 138 depends on the statute and the circumstances.
Step 3 — Send the Written Legal Demand Notice

A written demand notice must be issued to the cheque drawer within 30 days from receipt of information from the bank that the cheque has been dishonoured, in accordance with Section 138.

The notice should clearly identify the cheque, its amount, the dishonour and the demand for payment. It should be served through a legally permitted method, and proof of service should be preserved.

The supplied material refers to registered post and publication in a widely circulated national newspaper. The precise statutory service methods and the requirements for using each method must be checked against the current law.
Step 4 — Allow the Statutory Payment Period

The drawer generally has 30 days from receipt of the legal demand notice to make payment of the cheque amount under Section 138.

Evidence of the date of receipt is important because the date on which the cause of action arises depends on compliance with the statutory notice and payment requirements.
Step 5 — File the Complaint Within the Prescribed Time

If the drawer does not make the required payment within the statutory period, the cause of action may arise. The complaint must then be filed within the applicable statutory limitation period, generally one month from the date the cause of action arises.

The competent court and the proper complainant must be determined under the current version of the Negotiable Instruments Act and the applicable criminal procedure.

Do not miss the deadline. The 30-day demand-notice period and the complaint-filing period are separate stages. A calculation error may jeopardise the complaint. Have the dates and supporting documents reviewed promptly by a licensed advocate.

4. Consequences and Remedies Under the NI Act

4.1 Criminal Punishment

Under Section 138, the punishment may include imprisonment for a term of up to one year, a fine which may extend to three times the amount of the cheque, or both, subject to the applicable statutory text.

4.2 Recovery From the Fine

Section 138 provides for payment to the holder of the cheque out of the fine realised by the court, up to the face value of the cheque, in accordance with the statute.

The actual amount recovered depends on the court's order, the fine imposed and the amount realised.

4.3 Civil Remedy for the Balance

Section 138(3) addresses the right to pursue civil recovery where the amount recovered through the criminal fine is insufficient to cover the cheque amount.

A claimant should obtain advice on the available civil claim, limitation, jurisdiction and the effect of any payment already received.

4.4 Preserve the Evidence

Original cheque and cheque number.
Bank dishonour slip or return memo.
Copy of the legal demand notice.
Proof of dispatch and service.
Relevant correspondence and payment records.
Details of any partial payment or settlement.

5. Misappropriation of Money, Criminal Breach of Trust and Fraud

Where funds or property are dishonestly converted, misused or obtained through deception, the relevant facts may raise issues under the Penal Code, 1860. The correct provision depends on the conduct, intention, entrustment and evidence in the particular case.

Section 403 — Dishonest Misappropriation of Property

Section 403 concerns dishonest misappropriation or conversion of movable property for a person's own use.

The supplied material identifies punishment of imprisonment for up to two years, a fine, or both, subject to the applicable statutory text.

Whether money or property has been dishonestly misappropriated must be established from the facts and evidence.

Section 406 — Criminal Breach of Trust

Section 406 provides punishment for criminal breach of trust. The underlying offence involves legally relevant entrustment of property, followed by dishonest misappropriation, conversion or use contrary to the applicable legal direction or obligation.

The supplied material identifies imprisonment for up to three years, a fine, or both, subject to the statute.

Examples requiring factual assessment may involve an employee, agent, partner or business associate entrusted with money or property.

Section 420 — Cheating and Dishonestly Inducing Delivery of Property

Section 420 concerns cheating that dishonestly induces the delivery of property or another act specified in the provision. A central issue is whether deception and the requisite dishonest intention existed at the relevant time.

The supplied material identifies punishment of imprisonment for up to seven years and a fine, subject to the statutory text.

A later failure to repay a debt does not, by itself, necessarily establish cheating. The facts must support the elements of the offence.

Criminal Allegation vs Civil Dispute

A disagreement over payment or a breach of contract is not automatically a criminal offence. The evidence must establish the required elements of the particular offence before criminal liability can be found.

Civil recovery may also need to be considered where money remains outstanding, subject to the applicable law and the facts.

6. CR Case and GR Case: Criminal Complaint Procedure

6.1 CR Case — Complaint Case

A complainant may submit a written complaint directly before a competent Magistrate where the law permits a complaint case. Section 200 of the Code of Criminal Procedure, 1898, as applicable in Bangladesh, is associated with examination of a complainant upon taking cognizance of a complaint.

Depending on the circumstances, the court may examine the complainant and witnesses, consider the materials presented and take the steps permitted by law.

The proper court may be a Chief Metropolitan Magistrate (CMM) or Chief Judicial Magistrate (CJM) court, or another competent Magistrate court, depending on territorial and subject-matter jurisdiction.

6.2 GR Case — Police Case

Where information discloses a cognizable offence, a person may report the matter to the local police station. The police may register an FIR and investigate in accordance with the applicable criminal procedure.

A case proceeding on a police report is commonly referred to as a GR case in Bangladesh.

Whether an FIR can be registered, whether police investigation is authorised and what steps follow depend on the alleged offence and the applicable law.

Important distinction: CR and GR describe different procedural routes. Not every financial dispute gives rise to a criminal case, and not every complaint automatically results in a summons, investigation, charge or conviction.

7. Civil Remedies for Direct Money Recovery

A civil proceeding focuses on obtaining a judicial determination of the debt and, where the claim succeeds, an enforceable decree for the amount due. The appropriate claim and court depend on the nature and value of the dispute.

7.1 Money Suit in a Competent Civil Court

A money suit may be filed in the civil court having the relevant territorial and pecuniary jurisdiction. Depending on the valuation and applicable rules, the competent court may include an Assistant Judge or Joint District Judge court.

The legal framework may include:

The Code of Civil Procedure, 1908, as applicable in Bangladesh.
The Limitation Act, 1908.
The underlying contract, loan agreement or other source of liability.
Applicable evidentiary and court-fee requirements.

Limitation Period

The supplied material identifies three years as the general limitation period for many money claims. However, the applicable period and the date from which limitation begins depend on the nature of the claim, the relevant Schedule article, the due date, any acknowledgment or part-payment and other legally relevant facts.

A claimant should not assume that every debt claim has the same three-year deadline. The limitation provision must be identified for the specific cause of action.

7.2 Decree and Execution

If the claimant obtains a money decree and the judgment debtor fails to satisfy it, execution may be sought under the applicable procedural law.

Depending on the decree and the law, execution may involve:

Applications to enforce the decree.
Identification of property legally available for execution.
Attachment and sale where authorised by law.
Consideration of objections to execution or third-party claims.

8. Summary Suit and Order XXXVII of the CPC

Order XXXVII of the Code of Civil Procedure is associated with a summary procedure in legal systems where that Order applies. The supplied material identifies it as a potentially faster procedure for claims involving liquidated debts, negotiable instruments such as cheques, promissory notes and bills of exchange, or qualifying written contracts.

A summary procedure differs from an ordinary civil suit because the applicable rules may restrict the defendant's ability to defend without satisfying specified procedural conditions.

Verify before relying on this procedure: The availability and scope of Order XXXVII must be confirmed under the version of the CPC applicable in Bangladesh and the particular type of claim. Do not assume that every cheque or written contract automatically qualifies for a summary suit.

9. Summary Strategy Matrix

Issue	Primary Law and Provision	Venue / Court	Main Goal
Cheque bounced	Section 138, Negotiable Instruments Act, 1881	Competent criminal court under the applicable NI Act and criminal procedure provisions.	Establish the statutory offence and seek the legally available punishment and recovery from fine.
Entrusted money misused	Section 406, Penal Code, 1860	Competent Magistrate court or other forum with jurisdiction, depending on the applicable procedure.	Establish criminal breach of trust where the required elements are proved.
Dishonest misappropriation	Section 403, Penal Code, 1860	Competent criminal court.	Address dishonest misappropriation or conversion of property.
Cheating and dishonest inducement	Section 420, Penal Code, 1860	Competent criminal court.	Address cheating involving the required dishonest inducement and delivery of property.
Debt / money recovery	Money suit under applicable civil law and CPC	Civil court with the required territorial and pecuniary jurisdiction.	Obtain a civil decree for the debt and, where necessary, enforce the decree against assets legally available for execution.
Qualifying liquidated debt	Order XXXVII CPC, if applicable	Competent civil court under the applicable procedural rules.	Use the summary procedure where the claim and the law permit it.

10. Practical Checklist Before Taking Legal Action

For Cheque Dishonour

Original cheque and cheque date.
Bank presentation and dishonour records.
Date the bank dishonour information was received.
Legal demand notice and proof of dispatch.
Evidence of notice service or delivery.
Calculation of the payment period and complaint deadline.
Documents establishing the complainant's legal standing.

For Misappropriation or Fraud

Bank statements and transaction records.
Agreements, receipts and payment acknowledgments.
Evidence of entrustment, where relevant.
Communications and representations allegedly made.
Evidence relevant to dishonest intention.
Identity and role of the persons involved.
Assessment of the appropriate criminal and civil remedies.

For a Civil Money Suit

Documents establishing the debt and amount claimed.
Contractual due date and payment history.
Applicable limitation provision and deadline.
Correct territorial and pecuniary jurisdiction.
Calculation of principal, interest and other claimed amounts.
Evidence of demand, acknowledgment or part-payment.
Possible execution steps if a decree is obtained.

Questions to Discuss With an Advocate

Which statute and section apply to the facts?
Is a criminal complaint, civil suit or both legally available?
What is the exact limitation deadline?
Which court has jurisdiction?
What evidence is missing?
Can the claim be settled or mediated?
What remedies are available if the defendant does not pay?

Need Legal Assistance With Money Recovery?

Seek case-specific legal advice concerning cheque dishonour, banking disputes, criminal breach of trust, cheating allegations, money suits, legal notices and execution of civil decrees in Bangladesh.

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11. Legal Disclaimer

This page provides general legal information about cheque dishonour, misappropriation of funds, criminal proceedings and civil money recovery in Bangladesh. It is not a substitute for advice based on the documents and facts of an individual matter.

Statutory timelines, punishment, court jurisdiction, limitation periods and procedural requirements should be verified against the current legislation and binding judicial decisions before taking legal action.

In particular, the application of Section 138 of the Negotiable Instruments Act, 1881; Sections 403, 406 and 420 of the Penal Code, 1860; Section 200 of the applicable criminal procedure; the Limitation Act, 1908; and Order XXXVII CPC must be considered in context.

Official legal resource: Laws of Bangladesh — official legislation portal