2025 (10) TMI 171 - HC - Indian Laws

After acquittal in NI Act s.138 case, victim must first appeal under proviso to s.372 CrPC before invoking s.378 CrPC

Nita Kumar Iyer, Sri P. Harihar Kumar, Versus M/s. Sri Ventrures Land Developers India Ltd & Ors.

HC held that after acquittal in a NI Act s.138 case the victim must first prefer an appeal to the Court of Sessions under the proviso to s.372 CrPC rather ... Dishonour of Cheque - acquittal of offence u/s 138 of the Negotiable Instruments Act, 1881 - option available with complainant, of pursuing the remedy u/s 378 of the CrPC by approaching the High Court directly instead of availing the remedy under Section 372 of the CrPC when the order of acquittal which is sought to be challenged has been passed by the learned Magistrate - HELD THAT:- The jurisprudence in relation to the rights of victims has developed over the years as need was felt to extend the rights of the victims and enable them to prefer an appeal against any averse order passed by the Court acquitting an accused, convicting for a lesser offence or imposing a lighter sentence. In the 221st Report of the Law Commission of India, it was noted that an aggrieved person could not file an appeal against an order of acquittal. It was found that although a victim could prefer a revision petition, however, the same was a cumbersome process as the Sessions Court could have only remanded the matter if it found that the accused had been wrongly acquitted. Similarly, a complainant had no remedy to approach the Sessions Court against an order of acquittal passed by the Magistrate in a case instituted upon a complaint, and they were constrained to the remedy provided under Section 378 of the CrPC. Thus, to plug this gap, the proviso to Section 372 of the CrPC was added by way of an amendment in the year 2009. In the case of Celestium Financial v. A. Gnanasekaran [2025 (4) TMI 1703 - SUPREME COURT], the Hon’ble Apex Court has recognized a complainant in an NI Act case as a victim and observed that such complainants are entitled to prefer an appeal under Section 372 of the CrPC against order of acquittal. It is pertinent to note that although the Hon’ble Apex Court has observed that the complainant has the option of choosing between the remedies, however, no specific consideration is rendered on the fact as to whether the victim is required to first exhaust his remedy under Section 372 of the CrPC. In the opinion of this Court, the very purpose of Section 372 of the CrPC shall stand defeated if the victim is allowed to forego and waive the remedy before the learned Sessions Court under Section 372 of the CrPC. If the petition is allowed to continue before this Court, the parties will also stand to lose a forum of challenge. If the said proposition is expounded, in cases with multiple complainants, one complainant could choose to institute proceedings under Section 372 of the CrPC whilst the other may opt to approach the High Court. Such an eventuality will be absurd with potential of conflicting views being taken by Court of Sessions and the High Court. This Court is of the opinion that once an order of acquittal is passed by the learned Magistrate, the remedy available to the victim is to prefer an appeal before the Court of Sessions which is the Appellate Court in terms of the proviso to Section 372 of the CrPC which provides that an appeal by the victim shall lie to the Court to which an appeal ordinarily lies against the order of conviction of such Court - In the present cases, while the leave to appeals were granted, the same was done prior to the decision of the Hon’ble Apex Court in Celestium Financial v. A. Gnanasekaran. However, in light of the said decision, since the present cases pertain to an acquittal by the learned Magistrate, the matters would be required to be heard by the Court of Sessions in terms of the proviso to Section 372 of the CrPC. Considering that the matter has been pending before this Court since the year 2019, the learned Sessions Court is requested to dispose of the matter expeditiously and make endeavours to pass a final order with a period of 6 months. ISSUES PRESENTED AND CONSIDERED 1. Whether a complainant in proceedings under Section 138 of the Negotiable Instruments Act qualifies as a 'victim' within Section 2(wa) of the CrPC and thereby is entitled to prefer an appeal under the proviso to Section 372 of the CrPC against an order of acquittal. 2. Whether such a complainant, being a victim, has the option to bypass the appellate forum under Section 372 (Court of Sessions) and instead directly approach the High Court under Section 378(4) of the CrPC by seeking special leave to appeal from an order of acquittal. 3. Whether the High Court should exercise jurisdiction under Section 378(4) to entertain an appeal presented by a complainant/victim where an alternate efficacious remedy (appeal under proviso to Section 372 to the Court of Sessions) is available and has not been exhausted. 4. Whether, in the circumstances where leave to appeal before the High Court was earlier granted but subsequently a binding higher-court pronouncement recognizes the complainant as a victim entitled to proceed under Section 372, the matter should be transferred to the Court of Sessions for adjudication. ISSUE-WISE DETAILED ANALYSIS Issue 1: Complainant as 'Victim' entitled to appeal under proviso to Section 372 of the CrPC Legal framework: Section 2(wa) CrPC defines 'victim'; proviso to Section 372 CrPC grants a victim a right to prefer an appeal against an order acquitting the accused or convicting for a lesser offence or imposing inadequate compensation. Precedent treatment: The Apex Court has held that a complainant in a Section 138 NI Act case is a victim for purposes of Section 2(wa) and thus entitled to invoke the proviso to Section 372 CrPC. Interpretation and reasoning: The Court adopts the view that a complainant who suffers economic loss from a dishonoured cheque is a victim and thereby has the statutory right of appeal under the proviso to Section 372. The proviso was inserted to plug a gap that previously denied victims an ordinary appellate remedy against acquittal by a Magistrate; the legislative intent and Law Commission reports support extending a direct appellate right to victims. Ratio vs. Obiter: Ratio - a complainant in a Section 138 NI Act prosecution qualifies as a victim and may prefer an appeal under the proviso to Section 372 without seeking special leave under Section 378(4). Conclusion: The complainant is a victim for purposes of Section 372 and is entitled to an appeal to the Court of Sessions under the proviso. Issue 2: Whether a victim/complainant may choose to proceed under Section 378(4) to the High Court instead of Section 372 to the Court of Sessions Legal framework: Section 378(4) CrPC permits a complainant, upon obtaining special leave from the High Court within prescribed time limits, to present an appeal to the High Court from an order of acquittal in complaints-based prosecutions. Precedent treatment: The Apex Court recognized that a victim could proceed under the proviso to Section 372 and observed that a complainant, even if a victim, 'can still proceed under the proviso to Section 372 and need not advert to sub-section (4) of Section 378.' The Apex Court also observed that, in practice, a complainant may have approached the High Court under Section 378(4) before the proviso's recognition. Interpretation and reasoning: While the Apex Court's dicta indicate choice, this Court emphasizes that the legislative design of Section 372 confers an indefeasible right of appeal to the victim before the Court of Sessions, whereas Section 378 imposes conditions (special leave) on a complainant seeking to approach the High Court. Allowing unfettered election to the High Court would undermine the object of Section 372 and create practical and jurisprudential anomalies (e.g., multiple parallel appeals to different forums by different victims/complainants in the same matter). Ratio vs. Obiter: Ratio - although the Apex Court noted the availability of Section 378(4), the Court holds as a principle of law and judicial propriety that when an order of acquittal is passed by a Magistrate, the primary and appropriate remedy for a victim is an appeal to the Court of Sessions under the proviso to Section 372. Where that remedy exists, the complainant should not ordinarily be permitted to bypass it by initiating proceedings under Section 378(4) in the High Court except for compelling and substantial reasons. Conclusion: The complainant, though a victim, does not ordinarily have an unfettered option to bypass the Sessions Court and proceed directly to the High Court under Section 378(4); the remedy under Section 372 should generally be exhausted first unless compelling reasons justify deviation. Issue 3: Exercise of High Court jurisdiction under Section 378(4) where alternate efficacious remedy under Section 372 exists Legal framework: Section 372 proviso vests a right of appeal in victims to the Court of Sessions; Section 378(4) confers discretionary leave by the High Court to a complainant to appeal against acquittal. Precedent treatment: The Apex Court has acknowledged the limited scope of Section 378 and the wider remedial availability created by the proviso to Section 372. Interpretation and reasoning: The Court reasons that permitting direct High Court intervention under Section 378(4) in the absence of substantial reasons would defeat the legislative intent behind conferring an appeal to the Sessions Court, risk conflicting adjudications, and impair judicial propriety and forum hierarchy. The Court notes practical considerations (multiple complainants choosing different forums) and parity concerns (the accused cannot bypass the Sessions Court in analogous fashion under Section 374), stressing that the Sessions Court is the ordinarily appropriate forum for appeals from Magistrate acquittals. Ratio vs. Obiter: Ratio - the High Court should generally decline to entertain a complainant's application under Section 378(4) when the proviso to Section 372 provides an alternate efficacious remedy, unless compelling and substantial reasons are shown. Conclusion: Absent compelling and substantial reasons, the High Court should not exercise its discretionary jurisdiction under Section 378(4) to entertain an appeal by a complainant/victim when an appeal to the Court of Sessions under Section 372 is available. Issue 4: Transfer of matters and practical directions where leave to appeal before the High Court was earlier granted but subsequent law indicates Section 372 is the appropriate forum Legal framework: Courts must give effect to binding higher-court pronouncements and ensure proceedings are heard in the appropriate forum consistent with statutory scheme and judicial hierarchy. Precedent treatment: The Court relies on the Apex Court's recognition of complainants as victims and the remedial effect of the proviso to Section 372; it also considers principles of judicial propriety and efficacious relief. Interpretation and reasoning: Where leave was granted prior to the higher-court decision recognizing the complainant as a victim, the Court finds it appropriate to transfer the record to the competent Appellate Court of Sessions in conformity with the statutory appellate route. The Court emphasizes preservation of pleadings, the availability of time-bound adjudication, and directions to expedite disposal to address concerns about protraction. Ratio vs. Obiter: Ratio - where an appeal before the High Court was entertained before the change in law but the binding law indicates Section 372/Sessions is the proper forum, the High Court should transfer the matter to the Court of Sessions for adjudication; procedural safeguards (preservation of pleadings, expeditious disposal timelines) may be issued. Conclusion: The appeals before the High Court are to be disposed of by transfer of the records to the Court of Sessions for hearing under the proviso to Section 372; parties must appear on the listed date and the Sessions Court is requested to decide within a specified period (six months) subject to preservation of pleadings and procedural directives.