From Complainant to Champion: Supreme Court’s Game-Changing NI Act Verdict

Introduction

The landscape of criminal justice in India is undergoing a significant transformation, with a renewed focus on victim rights. In a pivotal judgment, the Supreme Court of India, in Celestium Financial v. A. Gnanasekaran Etc.¹, has delivered a resounding affirmation of the complainant’s status as a ‘victim‘ under Section 138 of NI Act². This pronouncement empowers complainants to file appeals against acquittals without the erstwhile requirement of seeking special leave, thereby streamlining the pursuit of justice for those who have suffered economic loss due to dishonored cheques. This article delves into the nuances of this landmark ruling, its rationale, and its implications, particularly in light of the impending implementation of the BNSS³, which is poised to replace the CrPC⁴.

The Lingering Question: Complainant as Victim under NI Act

For long, a grey area persisted in Indian law regarding the procedural rights of a complainant in a Section 138 NI Act case, particularly when an accused was acquitted. While the NI Act outlines the substantive offence, the procedural framework for appeals was governed by the CrPC. Section 378 of the CrPC often necessitated the complainant to seek ‘special leave‘ from the High Court to file an appeal against an acquittal, a process that was often cumbersome, time-consuming, and an added hurdle for the aggrieved party.

The central issue that confronted the Supreme Court in the matter was, whether an appeal would be maintainable under the proviso to Section 372 CrPC against an order of acquittal passed in a case instituted upon a private complaint under Section 138 of the NI Act, by treating the complainant in such a proceeding as a victim within the meaning ascribed to the term under Section 2(wa) of the CrPC.

The Supreme Court’s Rationale: Redefining Victimhood in Economic Offences

The two-Judge Bench, comprising Justice B.V. Nagarathna and Justice Satish Chandra Sharma, unequivocally held that a complainant under Section 138 of the NI Act indeed qualifies as a ‘victim’ under Section 2(wa) of the CrPC. The Court’s reasoning was rooted in a practical and purposive interpretation of the law, emphasizing the economic loss and injury suffered by the complainant due to the dishonour of the cheque. The bench articulated that in the context of a “deemed offence” under Section 138 of the NI Act, the complainant is undeniably the aggrieved party. By extending the definition of ‘victim’ to include such complainants, the Court ensured that they could avail the benefit of the proviso to Section 372 of the CrPC. This crucial provision allows a victim to prefer an appeal against an order of acquittal, or against conviction for a lesser offence, or against inadequate compensation, without requiring special leave under Section 378(4) of the CrPC.

The Court drew a powerful parallel, stating that “Symmetrical to a victim of an offence, a victim of a deemed offence under Section 138 of the Act also has the right to prefer an appeal against any order passed by the court acquitting the accused or convicting for a lesser offence or imposing an inadequate compensation.” This highlights the Court’s intention to place the rights of victims of economic offences on par with victims of other criminal offences. Furthermore, the judgment underscored that the mere fact that a Section 138 proceeding commences with a private complaint under Section 200 of the CrPC does not diminish the complainant’s status as a victim. In essence, under Section 138 of the NI Act, “both the complainant as well as the victim are one and the same person.” The Court emphasized that the right to appeal for a victim is a statutory right that should not be restricted by the stricter rigours applicable to appeals filed by the State or a complainant under Section 378. It stressed that a victim’s right to appeal, particularly under Section 372, is distinct and equally vital, deserving of a less cumbersome pathway. This ruling is a significant stride towards a more victim-centric criminal justice system, ensuring that those who suffer financial harm due to dishonored cheques have a direct and unencumbered avenue to seek appellate redress.

The Importance: Bridging a Grey Area and Looking to BNSS

The Supreme Court’s judgment on Section 138 NI Act appeals is immensely significant because it resolves a long-standing ambiguity and strengthens the position of complainants. Prior to this, the procedural labyrinth for appealing acquittals in cheque bounce cases often deterred complainants from pursuing justice further, effectively leaving them remediless in many instances. By unequivocally classifying the complainant as a ‘victim’ and granting them the direct right to appeal under Section 372 proviso, the Court has empowered countless individuals and businesses. This decision is particularly pertinent in the context of the BNSS, 2023, which is set to replace the CrPC. One of the stated objectives of the new criminal laws, including the BNSS, is to make the criminal justice system more victim-centric.

The definition of “victim” under the BNSS, found in Section 2(1)(y), largely mirrors the definition in the CrPC (Section 2(wa)): “victim” means a person who has suffered any loss or injury caused by reason of the act or omission of the accused person and includes the guardian or legal heir of such victim.

Crucially, the BNSS also retains and reinforces the victim’s right to appeal. Section 413 of the BNSS, which corresponds to Section 372 of the CrPC, explicitly states: “Provided that the victim shall have a right to prefer an appeal against any order passed by the Court acquitting the accused or convicting for a lesser offence or imposing inadequate compensation, and such appeal shall lie to the Court to which an appeal ordinarily lies against the order of conviction of such Court.”¹

Therefore, the Supreme Court’s interpretation in Celestium Financial aligns perfectly with the spirit and letter of the upcoming BNSS. The judgment pre-empts any potential ambiguity that might have arisen under the new legislation regarding the complainant’s standing as a victim in NI Act cases. It provides a strong judicial precedent that will undoubtedly guide the application of the BNSS provisions, ensuring a consistent and robust approach to victim rights in economic offences. The clear pronouncement means that even with the transition to the BNSS, the path for a complainant in a Section 138 case to appeal an acquittal remains direct and does not require seeking special leave, reinforcing the intent of empowering victims.

Conclusion

The Supreme Court’s judgment in this case is a beacon of hope for complainants under the NI Act, 1881. By definitively recognizing them as ‘victims’ and granting them an unhindered right to appeal acquittals, the Court has not only resolved a crucial legal grey area but has also significantly advanced the cause of victim justice in India. This ruling is a testament to the evolving jurisprudence that seeks to balance the rights of the accused with the imperative of providing meaningful recourse to those who have suffered due to criminal acts. As India transitions to the BNSS, this judgment stands as a strong foundation, ensuring that the enhanced victim-centric focus of the new laws is effectively realized in practice, particularly in the realm of economic offences. The journey towards a truly equitable criminal justice system continues, and this decision marks a commendable step forward.

Citations

1. Celestium Financial v. A. Gnanasekaran Etc (2025 INSC 804)
2. Negotiable Instrument Act, 1881
3.  Bharatiya Nagarik Suraksha Sanhita, 2023
4. Criminal Procedure Code, 1973 

Expositor(s):  Adv. Archana Shukla