Can complainant in section 138 case appeal acquittal without obtaining special leave? Supreme Court refers question to larger Bench

The Supreme Court has referred to a larger Bench the question whether a complainant in a cheque dishonour case under section 138 of the Negotiable Instruments Act can file an appeal against acquittal under the proviso to section 372 CrPC without obtaining special leave under section 378(4) CrPC. The Court observed that the issue has far-reaching consequences.

Report:

The Supreme Court has expressed disability to agree with a recent co-ordinate Bench ruling that permitted complainants in cheque dishonour cases to appeal acquittals as “victims” without seeking special leave, and referred the question to a larger Bench for an authoritative pronouncement.

A Bench comprising Justice Sanjay Kumar and Justice K. Vinod Chandran was hearing a Special Leave Petition filed by M/s Everest Automobiles against M/s Rajit Enterprises, challenging a judgment of the Punjab and Haryana High Court dated April 10, 2024.

Counsel for the petitioner, Mr B Badrinath, placed reliance on the recent decision in Celestium Financial v. A. Gnanasekaran (2025 INSC 804), wherein a coordinate Bench had held that a complainant in a section 138 case qualifies as a “victim” entitled to file an appeal under the proviso to section 372 of the Code of Criminal Procedure, 1973 (Code), without seeking special leave under section 378(4) of the Code.

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The Court, however, noted that the Celestium Financial judgment, “did not take into account the earlier decisions of this Court in Satya Pal Singh vs. State of M.P.(2015 15 SCC 613 ) and Subhash Chand vs. State (Delhi Administration) (2013) 1 SCC 802), which have a bearing on both the aspects that were considered in the aforestated judgment, as they held to the contrary.”

The Bench observed that it was unable to agree with the interpretation placed by the coordinate bench upon the scheme of the Code in the context of sections 372 and 378. On its own reading of the statutory framework, the Court noted that a perusal of section 378(1), (2) and (3) reflects that the proviso to section 372 was carved out keeping in mind the distinction between the prosecuting agency and the victim.

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Significantly, the Court pointed out that section 378(4) and (5) were preserved in the Code, which make it incumbent upon a complainant who initiated prosecution on a complaint resulting in acquittal to obtain leave before filing an appeal before the High Court. This observation suggests that the legislature consciously retained the requirement of special leave for complainants in complaint cases, distinguishing them from victims in cases initiated on police reports.

Given the far-reaching consequences of the issue, the Bench directed that the matter be placed before the Chief Justice of India for appropriate directions regarding the constitution of a larger Bench.

Case: M/s Everest Automobiles v. M/s Rajit Enterprises, SLP (Crl.) No. 12350/2024

Click here to read Order.