& is not encoding correctly in ColdFusion

& is correctly encoded in ColdFusion. The result you're getting is expected.

Now, some explanations. Browsers do in general render & as &. You should realize that the cfdump tag converts & into &, whereas cfoutput leaves it intact. Hence, if you run this code, 

<cfset x = "abdul & latheef">

<cfoutput>#x#</cfoutput><br>

<cfdump var = "#x#">

the result sent to the browser will effectively be

abdul & latheef<br>

abdul & latheef

The browser renders this as

abdul & latheef

abdul & latheef

which is the final result you see. However, if your starting point is this code instead

<cfset x = "abdul & latheef">

<cfoutput>#x#</cfoutput><br>

<cfdump var = "#x#">

then the result sent to the browser will effectively be

abdul & latheef<br>

abdul &amp; latheef

The browser renders this as

abdul & latheef

abdul & latheef

This explains why you see abdul & latheef.

Why would you expect an ampersand instead of the HTML encoding?  You are dumping the value of the variable, which contains the encoded version.  Just as if you outputted the variable.

If you output that variable to the browser you will also get the encoded version, but *the browser* will properly decode it to the ampersand. That is the result you *should* be desiring.

Jason