Judicial Shift in Section 138 NI Act Appeals: Recognizing Complainants as "Victims"

A significant legal development has emerged regarding the appellate procedure for cheque dishonor cases under Section 138 of the Negotiable Instruments (NI) Act. Following the Delhi High Court’s ruling in Goodyear India Ltd. v. Gurjeet Singh Bajaj (2025), the process for challenging acquittals has been streamlined to favor the aggrieved party.

The Shift in Legal Interpretation

The Delhi High Court, aligning with the Supreme Court’s precedent in Celestium Financial v. A. Gnanasekaran (2025 SCC OnLine SC 1320), has established that a complainant in a cheque bounce case qualifies as a “victim” under Section 2(wa) of the Code of Criminal Procedure (CrPC).

Previously, a complainant seeking to challenge an acquittal faced significant procedural hurdles:

• Mandatory Special Leave: Under Section 378(4) CrPC, complainants were required to seek "special leave to appeal" from the High Court.
• Procedural Barriers: The appeal could only proceed if the High Court granted this specific permission, a process often cited as time-consuming, costly, and technically burdensome.

New Appellate Rights under Section 372 CrPC

By recognizing complainants as victims, the courts have established, or rather reinforced the proviso to Section 372 CrPC, which provides an independent right to appeal without the need for special leave. This right applies in three specific scenarios:

1. Acquittal: When the accused is found not guilty.
2. Lesser Offence: When the accused is convicted of a less severe charge than what was originally filed.
3. Inadequate Compensation: When the court awards insufficient compensation to the victim.

The Supreme Court emphasized that because a cheque dishonor results in direct financial harm, the complainant fits the definition of a victim who has suffered loss due to the accused's default. 

The Delhi High Court, too, further observed that it’s co-ordinate Benches in Yogesh Kataria v. State (Govt of NCT of Delhi) & Anr [decided on 16.07.2025 in CRL.LP. 367/2025] , Abdul Malik v State (Govt of NCT of Delhi) & Anr. [decided on 22.07.2025 in CRL.LP. 378/2025] , Promila Lekhi v. Safe Hands Chits Pvt. Ltd. & Anr [decided on 14.07.2025 in CRL.LP. 360/2025], Shri Ujjawal Arora v. State and Ors. [decided on 15.07.2025 in CRL.LP./2025], taking note of the decision in Celestium Financial (Supra), have allowed the withdrawal of leave petitions filed before this Court with liberty to the petitioners/complainants to approach the concerned Sessions Court. 

Key Implications for Litigants

The reclassification of complainants from mere "petitioners" to "victims" has several practical benefits:

• Jurisdictional Change: Since Section 138 cases are tried by Magistrates, appeals under Section 372 are now directed to the Sessions Court rather than the High Court.
• Efficiency and Access: This shift makes the legal process faster and more accessible, particularly for small business owners and individuals who may lack the resources for prolonged High Court litigation.
• Victim-Centric Justice: The ruling reinforces a justice system that acknowledges financial injury as a legitimate form of harm, ensuring that technicalities do not block the path to recovery.

Summary Table: Procedural Comparison

This development marks a pivotal step in commercial litigation, ensuring that those affected by financial defaults can pursue justice effectively and promptly.