“Complainant-as-Victim” Doctrine: Supreme Court Recognises an Unfettered Right of Appeal to Cheque Dishonour Complainants under the Proviso to Section 372 CrPC

Introduction

In M/s. Celestium Financial v. A. Gnanasekaran & Ors. (2025 INSC 804) the Supreme Court of India (“SCI”) decisively resolved a long-standing interpretative conflict regarding the appellate rights of complainants in cheque-dishonour prosecutions under Section 138 of the Negotiable Instruments Act, 1881 (“NI Act”). The Court held that such a complainant is a victim within the meaning of Section 2(wa) of the Code of Criminal Procedure, 1973 (“CrPC”) and may therefore file an appeal against an acquittal directly under the proviso to Section 372 of the CrPC—without seeking special leave under Section 378(4).

The appeal arose out of three private complaints filed by Celestium Financial, a finance partnership, against borrowers whose repayment cheques were dishonoured. All three accused were acquitted by the Magistrate, and the Madras High Court subsequently refused special leave to appeal. Celestium approached the Supreme Court contending that—as a victim—it could appeal as of right under Section 372. The judgment, delivered by Nagarathna J. (with Satish C. Sharma J. concurring), overturns the High Court, remands the matter for merits' consideration, and crystallises a significant new precedent on victim rights.

Key Issues

• Whether a complainant in a Section 138 NI Act prosecution qualifies as a victim under Section 2(wa) CrPC.
• Whether such a complainant must obtain special leave under Section 378(4) CrPC to appeal an acquittal, or can rely on the proviso to Section 372 CrPC for a direct appeal.

Summary of the Judgment

1. The Court set aside the Madras High Court’s order refusing leave and recognised Celestium’s right to appeal directly as a victim.
2. It clarified that the proviso to Section 372 CrPC, inserted in 2009, confers an unqualified right of appeal on victims against: (a) acquittal, (b) conviction for a lesser offence, or (c) inadequate compensation.
3. A complainant in a cheque-dishonour case suffers economic injury and thus fits the statutory definition of victim; the complainant and victim are the same person in such prosecutions.
4. Accordingly, the procedural rigour of Section 378(4)—special leave to appeal—does not apply. Victims may choose to file under Section 372 directly; if they elect Section 378 they must comply with its leave requirement, but the statute now offers an easier pathway.
5. The Court followed the majority reasoning of Lokur J. in Mallikarjun Kodagali v. State of Karnataka (2019) 2 SCC 752 and expressly declined to adopt the contrasting view of Gupta J. in that case.
6. Celestium was granted four months’ time to file its appeals before the appropriate appellate forum without facing limitation hurdles.

Analysis

a. Precedents Cited and their Influence

• Mallikarjun Kodagali v. State of Karnataka (2019) 2 SCC 752: Divergent opinions examined whether victims need leave to appeal. • Lokur J.: Victim’s appeal requires no leave. • Gupta J.: Leave is still needed.
  Celestium explicitly adopts Lokur J.’s broader, victim-centred interpretation, thereby tilting the balance decisively toward unrestricted victim appeals.
• Law Commission Reports & Committee Papers (154th, 221st LCI, Justice Malimath Committee 2003, Prof. Madhava Menon Committee 2007): The Court marshalled these reports to demonstrate Parliament’s intent to fortify victim rights, culminating in the 2009 amendments introducing Section 2(wa) and the Section 372 proviso.
• UN Declaration of Basic Principles of Justice for Victims of Crime and Abuse of Power (1985): Cited to support a purposive, victim-oriented reading of domestic law.

b. Legal Reasoning of the Court

1. Textual Interpretation • Section 2(wa) defines victim expansively to include anyone suffering loss or injury from the act/omission forming the charge.
   • Dishonour of a cheque indisputably causes economic loss; the complainant is the immediate sufferer.
   • Ergo, the complainant falls within the term victim.
2. Harmonisation of Sections 372 & 378 • Section 372 is an opening embargo (“no appeal shall lie except…”) followed by an enabling proviso for victims. • Section 378 regulates appeals by the State and by complainants who are not relying on victim status. • Victim’s right in the proviso is intended to be superior and cannot be cut down by importing Section 378 conditions.
3. Equality of Appeal Rights • An accused convicted at trial enjoys an appeal as of right (Section 374). • To achieve parity, a victim of crime must also have an unconditional right to challenge an acquittal.
4. Purpose of 2009 Amendment • Legislative intent was to redress imbalance between State-centric prosecution and victim’s personal stake. • Re-introducing leave requirement would undermine that reform.
5. Special Nature of NI Act Prosecutions • Section 143 NI Act adopts summary trial procedure; the State is largely absent. • Private complainant drives prosecution; denial of direct appellate remedy would leave victims remediless where High Court refuses leave.

c. Anticipated Impact

• Streamlined Appellate Access: Complainants in Section 138 cases (and any victim in complaint-based offences) can bypass the Section 378(4) hurdle, reducing delay and litigation costs.
• Uniform National Position: The decision resolves conflicting High Court views and the split in Mallikarjun Kodagali, providing clarity to subordinate courts.
• Pro-Victim Jurisprudence: Affirms the constitutional value of victim participation, likely influencing future reforms in criminal procedure—particularly the ongoing efforts to overhaul CrPC via the Bharatiya Nagarik Suraksha Sanhita Bill.
• Increased Appellate Workload: High Courts/Sessions Courts may witness a surge in victim-initiated appeals; courts must manage docket pressures while ensuring speedy disposal.
• Negotiable Instruments Litigation Dynamics: Defence strategy will recalibrate knowing that an acquittal is more readily appealable; may incentivise earlier settlements or compounding under Section 147 NI Act.

Complex Concepts Simplified

1. Victim (Section 2(wa) CrPC)

A victim is anybody who suffers loss—physical, mental, reputational, or financial—from the act for which the accused is charged. The definition is inclusive (it also covers guardians/legal heirs), making it broad and flexible.

2. Section 138 NI Act – “Cheque Bounce” Offence

• Creates a deemed offence when a cheque is dishonoured for insufficiency of funds, subject to procedural safeguards (notice within 30 days, 15-day payment window, etc.).
• Punishable with imprisonment up to 2 years and/or fine up to twice the cheque amount.

3. Special Leave to Appeal (Section 378(4) CrPC)

When a complainant wishes to challenge an acquittal in a complaint case, they normally must first persuade the High Court to grant leave. Only after leave is granted can the appeal be registered. The Supreme Court now clarifies that victims need not undergo this step.

4. Proviso v. Main Provision

A proviso carves out an exception. Here, while Section 372’s main body says no appeal shall lie, the proviso opens a gateway for victims. If an individual falls inside the proviso, the negative bar is lifted for them.

5. Choice of Appellate Route

A victim who is also a complainant has two doors: (1) Section 372 Proviso – direct, unconditional. (2) Section 378(4) – conditional (seek leave). The Court says door (1) is fully open; door (2) remains optional.

Conclusion

The Supreme Court’s ruling in Celestium Financial cements the “complainant-as-victim” doctrine and completes the trajectory begun by the 2009 CrPC amendments. By granting cheque-dishonour complainants an untrammelled right to appeal, the Court:

• Aligns Indian criminal procedure with global victim-rights standards;
• Ensures parity between the appellate rights of the accused and the injured party;
• Simplifies and accelerates access to justice in highly prevalent Section 138 litigation;
• Provides authoritative guidance that will influence thousands of pending and future cases nationwide.

Practitioners should reassess strategy in NI Act matters, and trial courts must explicitly record victim status in their judgments to facilitate seamless appellate review. Above all, the decision signals the judiciary’s continued commitment to a victim-centric criminal justice system where procedural obstacles do not eclipse substantive fairness.