From Special-Leave to Statutory Right: High Court Affirms that NI-Act Complainants May Appeal Acquittals Directly Under the Proviso to Section 372 CrPC

1. Introduction

Case: Raj Kumar v. Rajender, CRM-A-826-2025 (Punjab & Haryana High Court, 07 July 2025)

Bench: Justice Sumeet Goel

Raj Kumar (complainant) filed an appeal against the acquittal of Rajender in proceedings under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). The appeal was wrongly instituted under Section 378(4) of the Code of Criminal Procedure, 1973 (CrPC) with an application for “special leave” to appeal. During preliminary hearing, counsel cited the fresh Supreme Court ruling in Celestium Financial v. A. Gnanasekaran, 2025 INSC 804, which re-characterises an NI-Act complainant as a “victim” entitled to appeal under the proviso to Section 372 CrPC without seeking such leave. Justice Goel had to decide:

Whether, post-Celestium Financial, an appeal against acquittal in a Section 138 case can still be maintained under Section 378(4); and
What to do with an appeal already filed in that procedural form.

2. Summary of the Judgment

The High Court held that, after the Supreme Court’s authoritative declaration in Celestium Financial, a complainant under Section 138 NI Act is a “victim” for purposes of Section 2(wa) CrPC and thus enjoys an independent statutory right to appeal an acquittal under the proviso to Section 372 CrPC. Consequently:

An appeal filed under Section 378(4) with an application for leave is “procedurally misconceived”.
Given the paramountcy of substantive justice, outright dismissal on technical grounds would waste judicial resources. The Court therefore:
- Disposed of the current appeal as not maintainable under Section 378(4),
- Remitted the papers to the Sessions Judge, Mahendragarh at Narnaul, directing that they be treated as a properly instituted appeal under the proviso to Section 372 CrPC (or Section 413 of the upcoming Bharatiya Nagrik Suraksha Sanhita, 2023).
Clarified that Celestium Financial operates retrospectively; hence, even appeals concerning transactions prior to 2025 must follow the new route.

3. Analysis

3.1 Precedents Cited

Celestium Financial v. A. Gnanasekaran, 2025 INSC 804
- Central precedent. Held that the NI-Act complainant is a “victim” because dishonour of cheque inflicts economic loss.
- Therefore, the complainant may appeal acquittal directly under the proviso to Section 372 CrPC without special leave.
Assistant Commissioner, Income Tax, Rajkot v. Saurashtra Kutch Stock Exchange Ltd. (2008) 14 SCC 171 & DIRECTORATE OF REVENUE INTELLIGENCE v. RAJ KUMAR ARORA, 2025 INSC 498
- Re-affirm the “Blackstonian theory” that judicial decisions declare pre-existing law and ordinarily operate retrospectively unless expressly declared prospective.

3.2 Legal Reasoning

Statutory Architecture:
- The NI Act is a special statute but contains no internal appeal provision.
- General criminal procedure therefore fills the gap.
- Section 372 proviso (inserted 31-12-2009) confers a right of appeal on the “victim” against acquittals, inadequate conviction or compensation.
- Section 378(4) allows a “complainant” in a case instituted upon complaint to appeal only after obtaining leave—an additional procedural hurdle.
Identity of “Complainant” and “Victim” under NI Act: Because only the payee/holder in due course who suffered monetary loss can initiate a Section 138 complaint, the complainant and the victim converge; hence the complainant qualifies for the more generous Section 372 route.
Retrospective Application: Drawing from Saurashtra Kutch Stock Exchange and fundamental principles of jurisprudence, Justice Goel held that Supreme Court pronouncements clarify the law “as it always stood”. Therefore, Celestium Financial applies to pending and future matters alike.
Procedural Economy & Substantive Justice: Rather than striking down the appeal, the High Court repurposed it to the correct forum. This reflects the modern judicial trend favouring resolution on merits over procedural pitfalls.

3.3 Impact of the Decision

Uniform Route for NI-Act Acquittal Appeals – Across India, complainants will increasingly bypass Section 378(4) and directly invoke Section 372 proviso, reducing preliminary “leave” litigation.
Sessions Courts as Appellate Forum – Since proviso appeals lie to the Court “to which an appeal ordinarily lies against the order of conviction” (i.e., Sessions Court), the first appellate workload shifts from High Courts to Sessions Courts.
Lower Procedural Barriers – No need for special-leave petitions translates into quicker access to appellate scrutiny for cheque-bounce victims.
Retrospective Reach – Pending appeals filed under Section 378(4) may now be converted; litigants and courts must audit existing dockets.
BNSS Alignment – The judgment anticipates the Bharatiya Nagrik Suraksha Sanhita, 2023 (the code poised to replace CrPC), mapping Section 372 proviso to Section 413 BNSS and Section 378(4) to Section 419(4).

4. Complex Concepts Simplified

Section 138 NI Act – Criminalises the dishonour of a cheque for insufficiency of funds, deeming it an offence punishable by imprisonment or fine.
Complainant vs. Victim – “Complainant” is the person who files the criminal complaint. “Victim” (Section 2(wa) CrPC) is anyone who suffers loss or injury from the offence, including legal heirs. In cheque-bounce cases they are the same individual—but the term “victim” unlocks a direct right of appeal.
Section 372 Proviso – Added in 2009, it grants victims a right to appeal, as of right, against acquittal, inadequate conviction or compensation, without any need to obtain the State’s sanction or the Court’s leave.
Section 378(4) CrPC – Before Celestium Financial, complainants in private-complaint cases needed High-Court permission (special leave) to appeal an acquittal—an extra procedural gate.
Retrospective Operation of Judgments – Courts “declare” what the law has always meant; unless expressly stated otherwise, a new precedent applies to past and ongoing cases.
BNSS 2023 – A proposed code to replace CrPC. Section 413 BNSS corresponds to Section 372 proviso; Section 419(4) corresponds to Section 378(4).

5. Conclusion

The Punjab & Haryana High Court’s ruling crystalises the post-Celestium Financial landscape: a complainant in a cheque-bounce case is a “victim” endowed with an unconditional statutory right to appeal under the proviso to Section 372 CrPC. Appeals erroneously filed under Section 378(4) should not be summarily rejected; they may be re-channeled to the competent Sessions Court to preserve substantive justice. The decision thus:

Re-aligns procedural practice with the Supreme Court’s latest interpretation,
Underscores the retrospective effect of precedent, and
Signals a shift toward victim-centric criminal procedure, likely to echo through innumerable NI-Act prosecutions nationwide.