The legal framework governing cheque dishonour, primarily encapsulated in the Negotiable Instruments Act, 1881 (NI Act), frequently results in convictions that carry not only a significant financial penalty but also a term of imprisonment. For those convicted, the first step after the trial court’s judgment is often to file an appeal alongside an application for bail and suspension of sentence. The order passed by the Court of Sessions for Greater Mumbai in Criminal Bail Application No. 1183 of 2024 in Criminal Appeal No. 296 of 2024 provides a precise example of how an appellate court handles the post-conviction bail of accused persons in cases under Section 138 of the NI Act.

The application was filed by M/s. Raj V. Jewellery (Appellant/Accused No. 1, a firm), and its directors/partners, Gaurav Gandhi (Accused No. 2) and Hitesh Babubhai Bavishi (Accused No. 3), collectively referred to as the Appellants/Accused. They had been convicted by the trial court in C.C. No. 4149/SS/2016 vide judgment dated March 30, 2024. The conviction was for the offence punishable under Section 138 read with Section 141 of the NI Act, which pertains to the dishonour of a cheque by a company. The sentence awarded was Rigorous Imprisonment for a term of six months each for the individuals (Accused Nos. 2 and 3). Furthermore, they were collectively directed to pay a substantial amount of Rs. 29,42,000/- to the complainant by way of compensation within three months, with an additional default sentence of Simple Imprisonment for three months each.

Faced with a substantive sentence of imprisonment, the appellants filed an appeal challenging the legality and propriety of the conviction. Crucially, along with the appeal, they moved the bail application, seeking release pending the final decision on their appeal. The court heard the arguments presented by the learned advocate for the appellants. The central premise for the grant of post-conviction bail was based on two primary factors, which are commonly considered in such cases.

Firstly, the court noted that the individual appellants, Gaurav Gandhi and Hitesh Babubhai Bavishi (Accused Nos. 2 and 3), were on bail during the entire period of the trial. The fact that an accused was not considered a flight risk or a danger to society during the investigation and trial period is a weighty factor in their favour when seeking post-conviction bail, especially when the sentence is relatively short. Secondly, and perhaps more importantly, the court took note that the appellants had already challenged the conviction by filing a formal appeal. The substantive sentence of imprisonment and the direction to pay compensation were concurrently suspended by the appellate court pending the disposal of the appeal.

In cheque dishonour cases, the appeal and suspension of sentence are inherently linked to the subsequent grant of bail. Once the appellate court suspends the substantive sentence (imprisonment) imposed by the trial court, the justification for continued detention of the convicted person significantly diminishes. Based on these considerations, the Additional Sessions Judge, K. P. Shrikhande, concluded that the appellants/accused could be appropriately released on bail. The Criminal Bail Application No. 1183 of 2024 was allowed. The court ordered that Gaurav Gandhi and Hitesh Babubhai Bavishi be released on bail upon executing a Personal Recognizance (P.R.) bond of Rs. 25,000/- each with surety in the like amount. A pragmatic provision was also included, granting the appellants liberty to furnish cash security in lieu of a solvent surety—a common practice to expedite release. This judicial order underscores the principle that in NI Act cases, where the dispute is essentially commercial and the appellants have commenced the appellate process with a suspended sentence, the right to liberty pending appeal is generally upheld, subject to furnishing adequate security.