Dismissal of Cheque Bounce Complaint for Default is Acquittal — Victim Can Appeal Without Seeking Leave: Punjab & Haryana High Court

“A Complainant in a Cheque Dishonour Case is a ‘Victim’ Under CrPC and Can Appeal an Acquittal Without Leave of the High Court” - In a judgment reinforcing the evolving jurisprudence on victims’ rights in cheque dishonour proceedings, the Punjab and Haryana High Court on October 13, 2025, held that dismissal of a complaint under Section 138 of the Negotiable Instruments Act for non-prosecution amounts to an acquittal, and the complainant, being a 'victim', is entitled to file an appeal under the proviso to Section 372 CrPC without seeking leave under Section 378(4).

Justice Manisha Batra held that the application for leave to appeal be treated as a regular appeal under Section 372 CrPC and transferred it to the Sessions Court at Panipat for adjudication on merits.

Complaint Dismissed for Default, Complainant Sought Leave to Appeal

The applicant, M/s Om Cement Store, through its proprietor, had filed a complaint under Sections 138 and 142 of the Negotiable Instruments Act, 1881, against the respondent Pardeep, alleging dishonour of cheque. The complaint was, however, dismissed on 05.08.2023 by the Sub-Divisional Judicial Magistrate-cum-ACJ (SD), Samalkha, for non-prosecution, i.e., for default in appearance or follow-up.

Rather than moving for restoration or revision, the complainant filed an application under Section 378(4) CrPC seeking leave to appeal, on the premise that the dismissal of the complaint resulted in acquittal of the accused, thereby entitling them to challenge it by way of appeal.

Citing the Supreme Court's landmark ruling in M/s. Celestium Financial v. A. Gnanasekaran [2025 (3) RCR (Criminal) 208], counsel for the applicant submitted that in such cases, the complainant, being the holder of the dishonoured cheque, qualifies as a "victim" under Section 2(wa) CrPC, and thus can directly appeal under the proviso to Section 372 CrPC without seeking special leave.

“Dismissal in Default is Acquittal — Victim Entitled to Appeal”: Court Relies on Purushotam Mantri and Celestium Financial

Justice Manisha Batra agreed with the contention, noting that the dismissal of a complaint for default is legally deemed an acquittal, as settled in Purushotam Mantri v. Vinod Tandon @ Hari Nath Tandon [2009 (1) RCR (Criminal) 442].

Having recognised the order as one of acquittal, the Court then examined whether leave to appeal under Section 378(4) CrPC was required, or if the complainant could proceed under Section 372 proviso, as a "victim".

Quoting the Supreme Court extensively from Celestium Financial, Justice Batra reiterated the following key principle:

“The victim of a crime must have an absolute right to prefer an appeal which cannot be circumscribed by any condition precedent… In the instant case, a victim under Section 138 of the Act, i.e., a payee or the holder of a cheque is a person who has suffered the impact of the offence… such a victim need not seek special leave to appeal from the High Court.”

The Court highlighted that Section 138 proceedings are private complaints initiated by the holder of the dishonoured cheque, and do not involve the State as a prosecuting party. Therefore, the complainant's right as a victim is not constrained by procedural preconditions applicable to State appeals under Section 378.

High Court held:

“The appeal along with the accompanying application is ordered to be remitted to the Court of learned Sessions Judge, Panipat with a direction to treat the same as having been filed under Section 372 CrPC.”

The Registry was directed to transmit the complete paper-book and case record to the Sessions Court. The applicant was instructed to appear before the Sessions Judge, Panipat, either in person or through counsel on 14.11.2025.

The High Court made it clear that it was not expressing any opinion on the merits of the case, leaving that entirely for the Sessions Court to consider.

Key Legal Takeaways from the Judgment

• Dismissal for default in a cheque bounce case is equivalent to acquittal — appealable by the complainant.

• Complainants in Section 138 N.I. Act cases are “victims” under Section 2(wa) CrPC and thus fall under the protection of the proviso to Section 372 CrPC.

• Victims need not seek special leave under Section 378(4) CrPC to file an appeal against acquittal.

• Section 372 CrPC now serves as an independent statutory right of appeal for victims, ensuring parity with the rights of the accused under Section 374 CrPC.

• Courts must recognise and give full effect to the 2009 amendment introducing the victim’s right to appeal under the CrPC.

Strengthening Victims’ Procedural Rights in Cheque Bounce Cases

The Punjab and Haryana High Court’s ruling in M/s Om Cement Store v. Pardeep is a reaffirmation of the victim-centric approach adopted by the Supreme Court in Celestium Financial. It ensures that technical procedural requirements do not defeat the statutory right of victims to challenge unjust acquittals, particularly in the context of cheque dishonour complaints where State involvement is absent.

By eliminating the need for leave to appeal, the Court has made the appellate process more accessible and streamlined for aggrieved complainants, upholding the true intent behind the proviso to Section 372 CrPC.

Date of Decision: 13.10.2025