The Punjab & Haryana High Court has clarified a significant procedural aspect of Section 138 of the Negotiable Instruments Act, holding that complainants in cheque bounce cases can appeal acquittals under Section 372 of the CrPC without seeking special leave. This judgment removes a procedural hurdle that previously required complainants to obtain special leave under Section 378(4) CrPC, streamlining access to appellate remedies in dishonoured cheque cases.
Background & Facts
The Dispute
The appellant, Krishan Kumar, had filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 against the respondent, S Jagmohan Singh, after a cheque issued by the latter was dishonoured. The complaint, filed in 2015, alleged that the respondent had issued a cheque that was returned unpaid by the bank, constituting an offence under the NI Act.
Procedural History
The case progressed through the following stages:
- 2015: Complaint filed before the Judicial Magistrate First Class (JMIC), Gurugram
- 2018: JMIC acquitted the respondent, leading to the present appeal
- 2026: Appeal filed before the Punjab & Haryana High Court seeking leave to appeal under Section 378(4) CrPC
Relief Sought
The appellant sought leave to appeal against the acquittal order, arguing that the trial court had erred in dismissing the complaint. The appeal was accompanied by an application for special leave under Section 378(4) CrPC, which governs appeals against acquittals in complaint cases.
The Legal Issue
The central question before the Court was whether a complainant in a Section 138 NI Act case must seek special leave under Section 378(4) CrPC to appeal an acquittal, or whether such appeals fall under the broader ambit of Section 372 CrPC, which does not require special leave.
Arguments Presented
For the Appellant
The appellant contended that the acquittal was erroneous and that the trial court had failed to appreciate the evidence properly. The appellant relied on the procedural requirement under Section 378(4) CrPC, which mandates special leave for appeals against acquittals in complaint cases.
For the Respondent
While the respondent’s arguments are not explicitly detailed in the judgment, the procedural stance would likely have been that the appeal was not maintainable without special leave, as required under Section 378(4) CrPC.
The Court's Analysis
The Court examined the interplay between Section 372 CrPC and Section 378 CrPC, focusing on the definition of "victim" under the CrPC. The Court relied on the Supreme Court’s decision in M/s Celestium Financial v. A. Gnanasekaran (2025 INSC 804), which held that a complainant in a Section 138 NI Act case falls within the definition of "victim" under Section 2(wa) CrPC. This interpretation brings such complainants within the purview of Section 372 CrPC, which allows victims to appeal acquittals without seeking special leave.
"This Court, while relying upon the dicta of the Hon’ble Supreme Court in M/s Celestium Financial vs. A. Gnanasekaran Etc., has held that an appeal against an order of acquittal in a proceeding under Section 138 of the Negotiable Instruments Act, 1881 preferred by the complainant, falls squarely within the purview of proviso to Section 372 of Cr.P.C./413 of BNSS, 2023."
The Court observed that Section 372 CrPC is broader and more accommodating than Section 378(4) CrPC, which imposes a stricter requirement of special leave. By interpreting the complainant as a "victim," the Court ensured that procedural technicalities do not obstruct substantive justice. However, rather than deciding the appeal on merits, the Court remitted the matter to the Sessions Court for adjudication under Section 372 CrPC.
The Verdict
The appeal was disposed of with the following directions:
- The appeal, along with accompanying applications, was remitted to the Sessions Judge, Gurugram, to be treated as an appeal under Section 372 CrPC.
- The Sessions Judge was directed to adjudicate the appeal on merits without being influenced by any observations made by the High Court.
- The Registry was directed to expeditiously transmit the records to the Sessions Judge.
What This Means For Similar Cases
Complainants Can Appeal Without Special Leave
The judgment clarifies that complainants in Section 138 NI Act cases are not required to seek special leave under Section 378(4) CrPC to appeal an acquittal. This simplifies the appellate process and reduces procedural barriers for victims of dishonoured cheques.
- Practitioners should now frame appeals under Section 372 CrPC rather than Section 378(4) CrPC in such cases.
- The definition of "victim" under Section 2(wa) CrPC is expansive enough to include complainants in cheque bounce cases.
Procedural Compliance Remains Critical
While the judgment removes the requirement for special leave, practitioners must ensure that appeals are filed within the prescribed limitation period and comply with other procedural requirements under Section 372 CrPC.
- Appeals must be filed within 60 days from the date of the acquittal order.
- The memorandum of appeal should clearly state that it is being filed under Section 372 CrPC.
Precedent for Future Cases
This judgment reinforces the principle that procedural technicalities should not impede substantive justice. Courts are likely to adopt a similar approach in future cases involving appeals against acquittals in Section 138 NI Act matters.
- Lower courts may now be more inclined to entertain appeals under Section 372 CrPC without insisting on special leave.
- The judgment provides a clear precedent for complainants seeking to challenge acquittals in cheque bounce cases.
