The Supreme Court has referred an important question on appellate rights in cheque dishonour cases to a larger Bench. The issue concerns appeals under Section 138 of the Negotiable Instruments Act.
The Court will decide whether a complainant can challenge an acquittal as a “victim” under the proviso to Section 372 of the Code of Criminal Procedure (now Section 413 of the Bharatiya Nagarik Suraksha Sanhita). The key question is whether such an appeal can be filed without seeking special leave under Section 378(4) CrPC.
A Bench comprising Justice Sanjay Kumar and Justice K. Vinod Chandran made the reference while hearing a Special Leave Petition filed by M/s Everest Automobiles against M/s Rajit Enterprises. The petition challenges a Punjab and Haryana High Court judgment dated April 10, 2024.
Reliance on Celestium Financial Decision
Counsel for the petitioner relied on the recent ruling in Celestium Financial vs. A. Gnanasekaran (2025 INSC 804).
In that decision, a co-ordinate Bench held that a complainant in Section 138 proceedings qualifies as a “victim.” The Court ruled that such a complainant may file an appeal against acquittal under the proviso to Section 372 CrPC. It also held that special leave under Section 378(4) is not required.
Bench Flags Conflict with Earlier Judgments
However, the present Bench noted that the ruling in Celestium Financial did not consider earlier binding precedents.
The Court referred to Satya Pal Singh vs. State of M.P. (2015) 15 SCC 613 and Subhash Chand vs. State (Delhi Administration) (2013) 1 SCC 802. These judgments interpreted the appellate remedy of complainants differently.
The Bench expressed reservations about the interpretation adopted in Celestium Financial, particularly regarding Sections 372 and 378 CrPC.
Interpretation of Sections 372 and 378 CrPC
The Court examined the scheme of Section 378(1), (2), and (3) CrPC. It observed that the proviso to Section 372 recognises the distinction between the prosecuting agency and the victim.
At the same time, the legislature retained Sections 378(4) and (5). These provisions require a complainant to obtain leave before filing an appeal against acquittal when the prosecution originates from a private complaint.
The Bench indicated that this statutory framework may conflict with the view taken in Celestium Financial.
Matter Sent to Larger Bench
The Court described the issue as one with “far-reaching consequences.” It held that authoritative clarification is necessary.
