Conviction Maintained for Dishonoured Cheque but Substantive Sentence Commuted to Release on Probation

The applicants were convicted under Section 138 of the Negotiable Instruments (NI) Act by the 2nd Additional Chief Judicial Magistrate, Dahod, in Criminal Case No. 2032 of 2012, and sentenced to one year of simple imprisonment and a compensation of Rs. 5,50,000.

This conviction was upheld by the Principal Sessions Judge, Dahod, in Criminal Appeal No. 03 of 2014.

During the pendency of the appeal, the applicants deposited the full cheque amount of Rs. 5,50,000, which was subsequently paid to the complainant via account payee cheque.

The applicants moved the High Court in revision to challenge the concurrent findings of the lower courts.

1. Whether the concurrent findings of conviction by the trial and appellate courts warrant interference in revisional jurisdiction notwithstanding the payment of the cheque amount.

2. Whether the court can extend the benefit of the Probation of Offenders Act, 1958, to an accused convicted under the NI Act who has already deposited the settlement amount.

The court applied Section 138 of the Negotiable Instruments Act, noting its quasi-criminal nature and compoundable status, emphasizing that punishment under the Act is a means to ensure payment and promote the credibility of cheques rather than retribution.

The court further relied on Section 397 read with 401 of the Code of Criminal Procedure, 1973, regarding the limits of revisional jurisdiction, which prohibits the re-analysis of evidence in the absence of perversity.

The court invoked Section 4 of the Probation of Offenders Act, 1958, and the precedent set by the Hon’ble Supreme Court in Sanjabij Tari v. Kishore S. Borcar (2025 INSC 1158) regarding the extension of probation benefits while maintaining conviction.

The Court observed that since the applicants had already deposited the full compensation amount which was received by the complainant, the primary object of the NI Act—compensatory justice—was satisfied.

The Court held that in its revisional jurisdiction, it cannot re-evaluate or re-interpret evidence unless the lower courts' findings are perverse; since no such perversity was found, the conviction was maintained.

However, considering the quasi-criminal nature of the offense and the proactive payment by the accused, the Court reasoned that custodial sentence was no longer necessary to serve the ends of justice.

Following the Supreme Court’s direction in Sanjabij Tari, the Court determined that the applicants were fit candidates for release on probation of good conduct instead of serving the substantive jail sentence.

It directed that the applicants be released on probation of good conduct under Section 4 of the Probation of Offenders Act for a period of one year, subject to executing a probation bond of Rs. 20,000 each with one surety.

The applicants must maintain peace and appear for sentencing if called upon during this period; the bond must be submitted to the trial court within 15 days.

The Revision Application was disposed of accordingly.