Cheque Bounce Cases: Supreme Court Flags Conflict in Law on Appeal Rights of Complainants, Refers to Larger Bench

The Supreme Court of India has referred to a larger bench the question of whether a complainant, in a case under Section 138 of the Negotiable Instruments Act, 1881, can file an appeal under the proviso to Section 372 of the Code of Criminal Procedure, 1973 [corresponding to Section 413 of the Bharatiya Nagarik Suraksha Sanhita (BNSS)] without first seeking special leave under Section 378(4) of the Code (corresponding to Section 419 of the BNSS).

A Bench of Justices Sanjay Kumar and K Vinod Chandran expressed doubt over the correctness of the judgment in Celestium Financial vs A Gnanasekaran and held that the issue requires an authoritative determination by a larger bench.

The Bench said it was unable to agree with the interpretation adopted in the said judgment regarding the scheme of the Code, particularly Sections 372 and 378. It observed that a reading of Section 378(1), (2), and (3) indicates that the proviso to Section 372 was introduced keeping in mind the distinction between the prosecuting agency and the victim.

Court further noted that Sections 378(4) and (5) were consciously retained, making it mandatory for a complainant, who initiates prosecution through a complaint and faces an acquittal, to obtain leave before filing an appeal before the high court.

The Bench was hearing an appeal filed by M/s Everest Automobiles against the April 10, 2024 order passed by the Punjab and Haryana High Court.

Counsel for the petitioner relied on the decision in Celestium Financial vs A Gnanasekaran (2025), where a coordinate bench had held that a complainant in a Section 138 case qualifies as a “victim” and can file an appeal under the proviso to Section 372 CrPC against an acquittal, without seeking special leave under Section 378(4).

However, the present Bench pointed out that the judgment did not consider earlier rulings in Satya Pal Singh vs State of Madhya Pradesh and Subhash Chand vs State (Delhi Administration), which had taken a contrary view on both aspects.

In view of this conflict, Court said the issue has far-reaching consequences and requires a clear and authoritative pronouncement by a larger bench.

Accordingly, it directed that the matter be placed before the Chief Justice of India for appropriate directions.

Case Title: M/s Everest Automobiles Vs Rajesh Enterprises 

Bench: Justices Sanjay Kumar and K Vinod Chandran 

Date of Judgment: February 12, 2026