For years, a complainant whose cheque-bounce prosecution ended in acquittal faced a demanding road: an appeal to the High Court under Section 378(4) of the Code of Criminal Procedure, available only with special leave. That road has been rebuilt. On 14 September 2026, the Gujarat High Court decided R/CR.A No. 1082 of 2025, Gujarat Laghu Udyog Sahkari Society Ltd. v. State of Gujarat, holding — on the strength of the Supreme Court's decision in Celestium Financial v. A. Gnanasekaran — that the complainant in a prosecution under Section 138 of the Negotiable Instruments Act, 1881 is a "victim", and may therefore appeal against acquittal under the proviso to Section 372 CrPC as a matter of right, without special leave. The court transferred the pending appeal to the Sessions Court, the forum where a victim's appeal from a Magistrate's acquittal lies.
The procedural knot
The society\'s complaint under Section 138 of the NI Act ended in acquittal before the trial court. Following the traditional route, the complainant approached the High Court under Section 378, the provision that requires special leave for an appeal against acquittal in a complaint case. While the appeal was pending, the Supreme Court decided Celestium Financial, holding that a Section 138 complainant is a victim of the offence — the person who suffers the economic loss the offence inflicts — and may therefore invoke the proviso to Section 372 CrPC.
What the High Court did
Justice Hemant M. Prachchhak drew the consequence directly: if the complainant is a victim, the appeal lies as of right under the proviso to Section 372, and it lies to the court to which an appeal against conviction would have gone — the Sessions Court. The High Court accordingly transferred the pending appeal to the Sessions Court to be treated as a victim\'s appeal, sparing the complainant the special-leave gauntlet altogether. The court noted the parallel the Supreme Court itself had drawn: the victim\'s right of appeal mirrors the accused\'s right to appeal a conviction.
The two routes compared
Section 378(4) route
Appeal to the High Court against acquittal in a complaint case — but only if the High Court first grants special leave. Refusal of leave ends the matter. Historically, a substantial share of complainant appeals ended precisely there.
Victim\'s route — proviso to S.372
Appeal as of right against acquittal, to the court to which an appeal ordinarily lies from the trial court\'s convictions — the Sessions Court for Magistrate-tried cheque cases. No leave requirement.
Under the BNSS, the same architecture appears in the proviso to Section 413 (victim\'s appeal) and Section 419 (appeals against acquittal with leave). Pending and future cheque-bounce acquittal appeals should be routed with this framework in mind, and appeals already pending in High Courts on the special-leave footing may — as here — be transferred rather than dismissed for want of the correct label.
Why it matters commercially
Section 138 remains the workhorse remedy for payment discipline in trade, and acquittals often turn on technical findings — service of notice, signatures, the character of the debt — that merit appellate scrutiny. Access to a leave-free appeal changes the settlement dynamics after acquittal: the drawer can no longer treat the leave stage as a probable terminus. At the same time, appellate deference to acquittals remains intact; the complainant must still demonstrate that the trial court\'s view was unsustainable, and the statutory presumptions under Sections 118 and 139 of the NI Act will frame that exercise.
For Delhi practice, where cheque cases occupy a large share of the Magistrates\' dockets, the immediate takeaways are procedural: diarise the limitation for a victim\'s appeal to the Sessions Court after any acquittal; where an appeal was filed on the Section 378 footing, consider seeking transfer or conversion; and when defending an acquittal, prepare for merits scrutiny rather than a leave-stage victory.
This article is for general information only and is not legal advice or a solicitation.
Frequently Asked Questions
What changed for cheque-bounce complainants?
The Supreme Court in Celestium Financial recognised that the payee of a dishonoured cheque suffers economic loss from the offence and is therefore a victim within the meaning of Section 2(wa) CrPC. As a victim, the complainant can appeal an acquittal under the proviso to Section 372 as of right, instead of seeking special leave under Section 378(4).
Where does the victim's appeal lie?
To the court to which an appeal ordinarily lies against conviction by the trial court. For an acquittal recorded by a Magistrate in a Section 138 case, that is the Sessions Court — which is why the Gujarat High Court transferred the appeal pending before it to the Sessions Court.
What is the position under the new criminal codes?
The structure carries forward. Under the Bharatiya Nagarik Suraksha Sanhita, 2023, the victim's right of appeal is housed in the proviso to Section 413, with Section 419 governing appeals against acquittal with leave. The victim route continues to dispense with the leave requirement.
Does this make appeals against acquittal easier to win?
It eases access, not outcome. The appellate court still applies the settled restraint that attends appeals against acquittal — the presumption of innocence is reinforced by the acquittal, and interference requires the trial court's view to be perverse or impossible, not merely debatable. But the complainant no longer risks the appeal dying at the leave stage.