In a significant ruling, the Supreme Court has held that complainants in cheque bounce cases under Section 138 of the Negotiable Instruments Act, 1881, are “victims” within the meaning of Section 2(wa) of the Code of Criminal Procedure, 1973 (CrPC), and are entitled to file appeals against acquittal under the proviso to Section 372 CrPC without seeking prior leave under Section 378(4).
The judgment was delivered by a Bench comprising Justice B.V. Nagarathna and Justice Satish Chandra Sharma in M/s Celestium Financial vs A. Gnanasekaran & Others, Criminal Appeal Nos. of 2025 (arising out of SLP (Crl.) Nos.137-139/2025).
Background:
The appellant, M/s Celestium Financial, a registered finance partnership firm, had extended various loans to the respondents. In partial discharge of liability, the respondents issued multiple cheques, which were subsequently dishonoured due to insufficient funds. Following statutory demand notices, the appellant filed three criminal complaints under Section 138 of the Negotiable Instruments Act before the Fast Track Court, Alandur.
The trial court, through separate judgments dated 7 November 2023, acquitted the accused under Section 255(1) CrPC, holding that the complainant failed to prove the existence of a legally enforceable debt, and that the respondents had successfully rebutted the statutory presumption under Section 139 of the Act.
Aggrieved, the appellant approached the Madras High Court under Section 378(4) CrPC seeking special leave to appeal. The High Court, however, rejected the petitions by a common order dated 12 June 2024, holding that the appellant had failed to establish that the trial court’s conclusions were perverse or erroneous to warrant interference.
Supreme Court’s Findings:
The Supreme Court examined whether the complainant in a cheque dishonour case qualifies as a “victim” under Section 2(wa) CrPC and whether such a person can invoke the proviso to Section 372 to file an appeal against acquittal without the need to obtain leave under Section 378(4).
Relying on Mallikarjun Kodagali v. State of Karnataka [(2019) 2 SCC 752] and other authorities, the Court ruled:
“The complainant under Section 138 is the victim who must also have the right to prefer an appeal under the said provision [Section 372].”
The Bench explained that the complainant suffers financial loss due to dishonour of the cheque and qualifies as a “victim” under CrPC. Hence, such complainants can directly appeal under the proviso to Section 372 without being subjected to the conditions under Section 378(4), which apply only to complainants who are not victims.
The Court rejected the contrary interpretation that would require victims in private complaint cases to always seek leave, noting:
“Such a right would not only be illusory but contrary to the intent and purpose of the amendment to Section 372 CrPC.”
Decision:
Allowing the appeal, the Supreme Court set aside the High Court’s order dated 12 June 2024 and remitted the matter for fresh consideration. It clarified that the appellant, being a victim of an offence under Section 138, had the right to appeal under the proviso to Section 372 CrPC and was not required to seek special leave under Section 378(4).
