Supreme Court Recognizes Complainant as Victim, Grants Unconditional Appeal Right in Cheque Bounce Acquittals

 Background

In a significant judgment delivered on April 8, 2025, the Supreme Court of India addressed a crucial legal question: Can a complainant in a cheque dishonour case under Section 138 of the Negotiable Instruments Act, 1881, appeal an acquittal order as a "victim" under the proviso to Section 372 of the Code of Criminal Procedure (CrPC), without seeking special leave under Section 378(4) of the CrPC? This issue arose in the case of M/s. Celestium Financial v. A. Gnanasekaran & Others, where the appellant, a financial firm, sought to challenge the acquittal of borrowers who had defaulted on multiple loans and whose cheques were dishonoured due to insufficient funds.

Factual Matrix

·       The appellant, M/s. Celestium Financial, had extended several loans to the respondents.

·       The respondents issued cheques to discharge their liabilities, but these cheques were dishonoured due to insufficient funds.

·       After serving statutory notices, the appellant filed criminal complaints under Section 138 of the Negotiable Instruments Act.

·       The trial court acquitted the accused, finding that the appellant failed to prove a legally enforceable debt and that the accused rebutted the statutory presumption under Section 139 of the Act.

·       The appellant’s attempts to appeal the acquittal were dismissed by the High Court, which held that leave to appeal under Section 378(4) of the CrPC was not warranted.

Core Legal Issue

The central legal question was whether the complainant in a cheque bounce case could bypass the requirement of seeking special leave (as mandated by Section 378(4) CrPC for appeals against acquittal in complaint cases) by invoking the status of "victim" under the proviso to Section 372 CrPC, which allows a victim to appeal an acquittal as a matter of right.

Supreme Court’s Analysis

1. Definition of 'Victim':

·       Section 2(wa) of the CrPC defines "victim" as a person who has suffered any loss or injury due to the act or omission for which the accused is charged, including their legal heirs.

·       The Court emphasized that in cheque dishonour cases, the complainant (the payee or holder of the dishonoured cheque) suffers economic loss and thus qualifies as a "victim" under this definition.

2. Legislative Intent and Statutory Provisions:

·       The proviso to Section 372 (inserted in 2009) grants victims the right to appeal against acquittals, convictions for lesser offences, or inadequate compensation, without the need for special leave.

·       Section 378(4) CrPC, however, requires a complainant in a case instituted upon a complaint to seek special leave to appeal an acquittal from the High Court.

3. Harmonizing the Provisions:

·       The Court noted that while a complainant and a victim may sometimes be the same person, the law now recognizes a broader right for victims to appeal.

·       If the complainant is also the victim (as in most cheque dishonour cases), they may appeal under the proviso to Section 372 CrPC as a matter of right, without needing to seek special leave under Section 378(4).

·       The Court clarified that the statutory rigours imposed on the State or complainant under Section 378 should not be read into the victim’s right under Section 372.

4. Precedents and Policy Considerations:

·       The judgment referred to previous Supreme Court decisions and Law Commission reports emphasizing enhanced rights for crime victims, including the right to appeal acquittals.

·       The Court favored a liberal, victim-centric interpretation, ensuring that victims of financial crimes like cheque dishonour are not left remediless due to procedural hurdles.

Key Ruling

The Supreme Court held:

"In the case of an offence alleged against an accused under Section 138 of the Act, the complainant is indeed the victim owing to the alleged dishonour of a cheque. In the circumstances, the complainant can proceed as per the proviso to Section 372 of the CrPC and he may exercise such an option and he need not then elect to proceed under Section 378 of the CrPC."

·       Therefore, a complainant in a cheque dishonour case who is also the victim can file an appeal against acquittal under the proviso to Section 372 CrPC, without the need for special leave under Section 378(4).

·       The impugned High Court order was set aside, and the appellant was granted liberty to file an appeal within four months, with the assurance that limitation issues would not be raised.

Implications

·       This judgment clarifies and strengthens the rights of victims in cheque dishonour cases, ensuring they are not procedurally barred from appealing acquittals.

·       It harmonizes the procedural law with the legislative intent of empowering victims, especially in financial offences where private complainants often suffer direct loss.

·       The ruling is expected to have significant impact on cheque bounce litigation, providing a more straightforward appellate remedy for aggrieved parties.

In summary:

The Supreme Court has affirmed that complainants in cheque dishonour cases, being victims of the offence, can appeal acquittals under the proviso to Section 372 CrPC as a matter of right, without the procedural barrier of seeking special leave under Section 378(4). This marks a progressive step towards victim-centric justice in financial crime cases.

   

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