Benefit of Probation extended in Section 138 NI Act proceedings where cheque amount is fully deposited

The applicant was originally convicted by the 5th Additional Chief Judicial Magistrate, Bhavnagar, under Section 138 of the Negotiable Instruments Act.

He was sentenced to six months of simple imprisonment and a fine of Rs. 10,000.

Both the applicant and the complainant appealed the order. The Principal Sessions Judge, Bhavnagar, rejected the applicant’s appeal and partially allowed the complainant’s appeal, directing the applicant to pay the cheque amount of Rs. 4,50,000 as compensation under Section 357(3) of the CrPC.

During the pendency of these revision applications, the applicant deposited the full amount of Rs. 4,50,000 before the trial court.

1. Whether the court should exercise its revisional jurisdiction to interfere with the concurrent findings of conviction given the quasi-criminal nature of the offense and the subsequent deposit of the cheque amount.

2. Whether the applicant-accused is entitled to the benefit of the Probation of Offenders Act, 1958, following the deposit of the compensation amount.

The court applied Section 138 of the Negotiable Instruments Act, noting that the offense is quasi-criminal and compoundable, intended to ensure payment and promote the credibility of cheques.

It relied on the principle that revisional courts should not re-analyze evidence in the absence of perversity.

The court further applied Section 4 of the Probation of Offenders Act, 1958, regarding release on probation of good conduct, and Section 357(3) of the Code of Criminal Procedure, 1973, concerning compensation.

The court also cited the precedent of the Hon’ble Supreme Court in Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158.

The court reasoned that since the applicant had deposited the entire compensation amount of Rs. 4,50,000, the primary object of the NI Act—ensuring recovery for the complainant—had been met.

The court found no perversity in the findings of the lower courts and therefore declined to re-evaluate the evidence under revisional jurisdiction.

However, considering the deposit and the nature of the offense, and following the Supreme Court's guidance in Sanjabij Tari, the court determined that while the conviction should be maintained, the actual sentence of imprisonment could be substituted with the benefits of the Probation of Offenders Act.

The Registry was directed to release the deposited Rs. 4,50,000 (with accrued interest) to the complainant. Criminal Revision Application No. 1422 of 2023 was disposed of with these directions, and No. 1420 of 2023 was disposed of as infructuous since the compensation had already been paid.