Victim Of Offence Has Right To Prefer Appeal U/S. 372 Proviso CrPC Irrespective Of Whether He Is Complainant Or Not: Supreme Court
The Supreme Court said that Section 138 of the Negotiable Instruments Act, 1881 being in the nature of a penal provision by a deeming fiction against an accused who is said to have committed an offence under the said provision, if acquitted, can be proceeded against by a victim of the said offence.
Justice B.V. Nagarathna, Justice Satish Chandra Sharma, Supreme Court
The Supreme Court held that the victim of an offence has the right to prefer an Appeal under the proviso to Section 372 of the Criminal Procedure Code, 1973 (CrPC), irrespective of whether he is a Complainant or not.
The Court held thus in Criminal Appeals filed against the common Judgment of the Madras High Court.
The two-Judge Bench of Justice B.V. Nagarathna and Justice Satish Chandra Sharma observed, “As already noted, the proviso to Section 372 of the CrPC was inserted in the statute book only with effect from 31.12.2009. The object and reason for such insertion must be realised and must be given its full effect to by a court. In view of the aforesaid discussion, we hold that the victim of an offence has the right to prefer an appeal under the proviso to Section 372 of the CrPC, irrespective of whether he is a complainant or not. Even if the victim of an offence is a complainant, he can still proceed under the proviso to Section 372 and need not advert to sub-section (4) of Section 378 of the CrPC.”
The Bench said that Section 138 of the Negotiable Instruments Act, 1881 (NI Act) being in the nature of a penal provision by a deeming fiction against an accused who is said to have committed an offence under the said provision, if acquitted, can be proceeded against by a victim of the said offence, namely, the person who is entitled to the proceeds of a cheque which has been dishonoured, in terms of the proviso to Section 372 of the CrPC, as a victim.
AOR Danish Zubair Khan represented the Appellant while AOR G. Sivabalamurugan represented the Respondents.
Case Background
The Appellant was the Complainant being a registered partnership firm engaged in the business of finance. The Appellant had extended financial assistance to the Respondents over a period of time. It was alleged that the Respondent No.1 was the principal borrower and in order to avail further credit, he obtained additional loans through the Respondent Nos.2 and 3, who acted at his behest. The said Respondent was carrying on a catering business and he had on earlier occasions availed several loans from the Appellant. In 2015, an outstanding sum of Rs. 16 lakhs stood due from him and seeking further financial accommodation, he along with his spouse entered into a sale agreement with an employee of the Appellant. Pursuantly, a further sum of Rs. 20 lakhs was sanctioned to him carrying interest at 18% per annum. Thereafter, in the Respondent No.2 availed a loan of Rs. 15 lakhs from the Appellant at an interest of 20% p.a., repayable in twelve equal monthly instalments of Rs. 1,25,000/-.
Subsequently, the Respondent No.3 availed a loan of Rs. 12 lakhs from the Appellant at an interest of 24% p.a. In partial discharge of his liability, Respondent No.2 issued a cheque of Rs. 6,25,000/- in favour of the Appellant, however, upon presentation of the same, it was dishonoured with the endorsement “Funds Insufficient”. Similarly, the cheque issued by the Respondent No.3 was returned unpaid for identical reasons. Therefore, the Appellant issued separate statutory notices, calling upon them to honour the respective amounts. Upon their failure to comply, the Appellant instituted criminal complaints before the Fast Track Court. In discharge of his liability, the Respondent No.1 issued three cheques and they were also dishonoured. On his failure to make good the payment, the Appellant instituted a complaint against him as well. The Judicial Magistrate acquitted the Respondents and thereafter, the High Court declined to exercise its discretionary jurisdiction to grant leave to Appeal. Being aggrieved, the Appellant was before the Apex Court.
Issue for Consideration
The central issue arising for adjudication in the Appeals 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.
Court’s Observations
The Supreme Court in the above regard, noted, “In the context of offences under the Act, particularly under Section 138 of the said Act, the complainant is clearly the aggrieved party who has suffered economic loss and injury due to the default in payment by the accused owing to the dishonour of the cheque which is deemed to be an offence under that provision.”
The Court held that the Complainant under the NI Act also qualifies as a victim within the meaning of Section 2(wa) of the CrPC and consequently, such a Complainant ought to be extended the benefit of the proviso to Section 372 CrPC, thereby enabling him to maintain an Appeal against an Order of acquittal in his own right without having to seek special leave under Section 378(4) of the CrPC.
“In the case of an offence alleged against an accused under Section 138 of the Act, we are of the view that the complainant is indeed the victim owing to the alleged dishonour of a cheque. In the circumstances, the complainant can proceed as per the proviso to Section 372 of the CrPC and he may exercise such an option and he need not then elect to proceed under Section 378 of the CrPC”, it added.
Furthermore, the Court said that the proviso to Section 372 CrPC does not make a distinction between an accused who is charged of an offence under the penal law or a person who is deemed to have committed an offence under Section 138 of the NI Act.
“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. When viewed from the perspective of an offence under any penal law or a deemed offence under Section 138 of the Act, the right to file an appeal is not circumscribed by any condition as such, so long as the appeal can be premised in accordance with proviso to Section 372 which is the right to file an appeal by a victim, provided the circumstances which enable such a victim to file an appeal are met”, it also observed.
The Court elucidated that the Complainant under Section 138 NI Act is the victim who must also have the right to prefer an Appeal under the said provision and merely because the proceeding under Section 138 of the NI Act commences with the filing of a Complaint under Section 200 of the CrPC by a Complainant, he does not cease to be a victim inasmuch as it is only a victim of a dishonour of cheque who can file a complaint.
“Thus, under Section 138 of the Act both the complainant as well as the victim are one and the same person. … The right to prefer an appeal is no doubt a statutory right and the right to prefer an appeal by an accused against a conviction is not merely a statutory right but can also be construed to be a fundamental right under Articles 14 and 21 of the Constitution. If that is so, then the right of a victim of an offence to prefer an appeal cannot be equated with the right of the State or the complainant to prefer an appeal”, it further enunciated.
The Court was of the view that the statutory rigours for filing of an Appeal by the State or by a Complainant against an Order of acquittal cannot be read into the proviso to Section 372 of the CrPC so as to restrict the right of a victim to file an Appeal on the grounds mentioned therein, when none exists.
“In the circumstances, we find that Section 138 of the Act being in the nature of a penal provision by a deeming fiction against an accused who is said to have committed an offence under the said provision, if acquitted, can be proceeded against by a victim of the said offence, namely, the person who is entitled to the proceeds of a cheque which has been dishonoured, in terms of the proviso to Section 372 of the CrPC, as a victim”, it concluded.
Accordingly, the Apex Court allowed the Appeals, set aside the impugned Judgment, and allowed the Appellant to file an Appeal having regard to the proviso to Section 372 CrPC within four months.
Cause Title- M/s. Celestium Financial v. A. Gnanasekaran Etc. (Neutral Citation: 2025 INSC 804)
Appearance:
Appellant: AOR Danish Zubair Khan
Respondents: AOR G. Sivabalamurugan, Advocates Selvaraj Mahendran, Meenakshi Rawat, C. Adhikesavan, Ratna Priya Pradhan, and Harikrishnan P.V.
