The Madhya Pradesh High Court has clarified that a conviction under Section 138 of the Negotiable Instruments Act does not automatically preclude bail, even where a sentence of imprisonment has been imposed. The Court granted bail on conditions that balance the accused’s liberty with the state’s interest in ensuring compliance with judicial orders.
Background & Facts
The Dispute
The applicant, Suresh Kumar Badhwani, was convicted by the Trial Court in RCT No. 669/2018 under Section 138 of the Negotiable Instruments Act for issuing a dishonored cheque. The Trial Court sentenced him to six months rigorous imprisonment with a fine of Rs. 2,93,000. The conviction was upheld by the Additional Sessions Judge on appeal in CRA No. 16/2024.
Procedural History
- 27 December 2023: Trial Court convicts applicant under Section 138 NI Act and imposes sentence.
- 28 May 2025: Additional Sessions Judge affirms conviction and sentence on appeal.
- 2026: Applicant files revision petition before the High Court and simultaneously applies for suspension of sentence and bail under Section 438(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023.
- 23 January 2026: High Court hears application for condonation of delay and bail simultaneously.
Relief Sought
The applicant sought suspension of his jail sentence and grant of bail pending disposal of the revision petition, arguing that he was falsely implicated and that the evidence was unreliable.
The Legal Issue
The central question was whether an accused convicted under Section 138 of the Negotiable Instruments Act and sentenced to imprisonment may be granted bail pending revision, and if so, under what conditions.
Arguments Presented
For the Appellant
Learned counsel argued that the applicant had good chances of success in the revision, as the Trial Court relied on unreliable evidence. He emphasized that Section 138 cases are civil in nature at their core, and imprisonment should not be a bar to liberty where the conviction is contested and the sentence is not for a heinous offence. He cited Arnesh Kumar v. State of Bihar to underscore that bail should be the norm, not the exception.
For the Respondent
The State opposed bail, contending that the conviction had been affirmed by two courts and that the fine amount was substantial. It argued that allowing bail would undermine the deterrent effect of the law and that the applicant had not demonstrated exceptional circumstances warranting suspension of sentence.
The Court's Analysis
The Court examined the nature of Section 138 NI Act offences and the discretionary power under Section 438(1) of BNSS, 2023 to suspend sentence pending revision. It noted that while the offence is criminal in form, its foundation lies in commercial transactions, and imprisonment is not always proportionate. The Court held that the applicant’s claim of innocence, coupled with the pendency of revision, warranted a liberal approach to bail.
"The imposition of a sentence under Section 138 does not ipso facto negate the right to bail pending revision, particularly where the accused is willing to comply with conditions and deposit a substantial portion of the fine."
The Court emphasized that Section 480(3) of BNSS provides a clear framework for bail conditions, including appearance, non-reoffending, and non-tampering with evidence. It found that the applicant’s willingness to deposit Rs. 1,00,000 (over one-third of the fine) and furnish a personal bond with solvent surety satisfied the requirements of proportionality and public interest.
The Verdict
The applicant won. The Court held that bail may be granted pending revision in Section 138 NI Act cases upon deposit of a substantial portion of the fine and execution of a personal bond with surety. The sentence was suspended subject to compliance with Section 480(3) of BNSS, 2023.
What This Means For Similar Cases
Bail Is Not Barred by Imprisonment in NI Act Cases
- Practitioners may now argue that imprisonment under Section 138 does not automatically disqualify an accused from bail pending revision.
- Courts must assess the merits of the revision petition and the accused’s willingness to comply with conditions, not merely the existence of a sentence.
Partial Fine Deposit Is Sufficient for Bail
- Depositing a significant portion of the fine (even if not the full amount) can satisfy the court’s concern for financial accountability.
- A personal bond with solvent surety, as permitted under Section 480(3), is a valid alternative to full payment.
Conditions Under BNSS Are Binding and Non-Negotiable
- The three conditions under Section 480(3) - appearance, non-reoffending, and non-tampering - are mandatory and must be strictly enforced.
- Failure to comply renders bail liable to cancellation without further hearing.
