Complainant In S.138 NI Act Case Can File Appeal Against Acquittal As 'Victim' Under S.372 Proviso CrPC : Supreme Court

In a significant judgment, the Supreme Court has held that a complainant in a cheque dishonour case for the offence under Section 138 of the Negotiable Instruments Act, 1881, is a "victim" within the meaning of Section 2(wa) of the Code of Criminal Procedure [Section 2(y) of Bharatiya Nagarik Suraksha Sanhita], who can file an appeal against acquittal under the proviso to Section 372 of the CrPC [Section 413 of the BNSS].

"In the case of an offence alleged against an accused under Section 138 of the Act, we are of the view that 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," held a bench comprising Justice BV Nagarathna and Justice Satish Chandra Sharma.

The bench was deciding an appeal against a judgment of the Madras High Court, which refused to grant leave under Section 378(4) of the CrPC to file an appeal against the order of acquittal in the cheque dishonour complaint filed by the appellant.

The Supreme Court held that the appellant need not have invoked Section 378(4) CrPC, and could have filed appeal as a "victim" as per Section 372 proviso. 

The Court held that "the complainant, who is the victim of a dishonour of cheque must be construed to be victim in terms of the proviso to Section 372 read with the definition of victim under Section 2(wa) of the CrPC."

It was by virtue of the 2009 amendment that the proviso to Section 372 was inserted in the CrPC, giving victims the right to file appeal agianst an order of acquittal. The Court noted that the definition of "victim" is an inclusive one, so as to include a person who has suffered any loss or injury.

Section 2(wa) CrPC - “victim” means a person who has suffered any loss or injury caused by reason of the act or omission for which the accused person has been charged and the expression “victim” includes his or her guardian or legal heir.

Accused in S.138 case is a "person who has been charged"

The Court next addressed the question whether an accused in a complaint under Section 138 NI Act can be regarded as a "person who has been charged." In this regard, the Court noted that the CrPC does not define the term "charge." In terms of judicial pronouncements, charge is actually a precise formulation of the specific accusation made against a person who is entitled to know its nature at the earliest stage. A person charged with a crime means something more than being suspected or accused of a crime by popular opinion or rumour and implies that the offence has been alleged against the accused parties according to the forms of law.

The Court, after noting the provisions of the NI Act, which creates a presumption against the accused, observed :

"The fact that under Section 138 of the Act, a deeming fiction has been introduced, wherein a person who comes within the scope and ambit of the section is a person who is deemed to have committed an offence and could be punished with both imprisonment as well as with fine, would mean that such a person is an accused and is charged for the said offence and tried under Chapter XXI of the CrPC by way of a summary trial."

Complainant in S.138 case is a person who has suffered loss

The Court held that since the complainant in a Section 138 NI Act case is a person who has suffered economic loss, such person can be regarded as a "victim" within the meaning of the CrPC.

"In the context of offences under the Act, particularly under Section 138 of the said Act, the complainant is clearly the aggrieved party who has suffered economic loss and injury due to the default in payment by the accused owing to the dishonour of the cheque which is deemed to be an offence under that provision. In such circumstances, it would be just, reasonable and in consonance with the spirit of the CrPC to hold that the complainant under the Act also qualifies as a victim within the meaning of Section 2(wa) of the CrPC. Consequently, such a complainant ought to be extended the benefit of the proviso to Section 372, thereby enabling him to maintain an appeal against an order of acquittal in his own right without having to seek special leave under Section 378(4) of the CrPC."

The Court noted that the the proviso to Section 372 does not make a distinction between an accused who is charged of an offence under the penal law or a person who is deemed to have committed an offence under Section 138 of the Act.

The proviso to Section 372 creates an absolute right to file an appeal without any conditions.

"The complainant under Section 138 is the victim who must also have the right to prefer an appeal under the said provision. Merely because the proceeding under Section 138 of the Act commences with the filing of a complaint under Section 200 of the CrPC by a complainant, he does not cease to be a victim inasmuch as it is only a victim of a dishonour of cheque who can file a complaint. Thus, under Section 138 of the Act both the complainant as well as the victim are one and the same person."

The Court added :

"In the circumstances, we find that Section 138 of the Act being provision, if acquitted, can be proceeded against by a victim of the said offence, namely, the person who is entitled to the proceeds of a cheque which has been dishonoured, in terms of the proviso to Section 372 of the CrPC, as a victim in the nature of a penal provision by a deeming fiction against an accused who is said to have committed an offence under the said provision, if acquitted, can be proceeded against by a victim of the said offence, namely, the person who is entitled to the proceeds of a cheque which has been dishonoured, in terms of the proviso to Section 372 of the CrPC, as a victim."

The Court disposed of the appeal, by setting aside the High Court's judgment and giving liberty to the appellants to file appeals under Section 372 proviso against the acquittal order.

Appearances - For petitioner - Danish Zubair Khan, Advocate

For respondents : G Sivabalamurugan, Advocate  

Case : M/s Celestium Financial v A Gnanasekaran 

Citation : 2025 LiveLaw (SC) 666

Click here to read the judgment