Cheque Bounce Rule 2025: What does Supreme Court’s Judgment Say

The appellant herein is the complainant, a registered partnership firm engaged in the business of finance. The appellant had extended financial assistance to the respondents (R.R. Caterers) over a period of time.

To discharge their debts, R.R. Caterers issued cheques to the appellant. These cheques were dishonoured due to “Funds Insufficient”.

Thereafter, the appellant issued separate statutory notices dated 12.11.2018 under Section 138 of the Act, calling upon the respondent to honour the respective amounts.

Upon failure to comply, the appellant instituted criminal complaints before the Fast Track Court at Alandur, which came to be registered as C.C. No. 417 of 2018 and C.C. No. 418 of 2018, respectively.

The Fast Track Court at Alandur acquitted the accused in all three complaints on 07.11.2023, finding the appellant failed to prove the legal enforceability of the debt.

The appellant sought leave to appeal under Section 378(4) CrPC, which was denied by the Madras High Court on 12.06.2024.

The High Court observed that the grant of leave under Section 378(4) of the CrPC is not a mere formality but a substantive safeguard designed to protect the rights of persons who, having been acquitted of criminal charges, ought not to be subjected to further protracted litigation. It was further held that the grant of leave is contingent upon the petitioner before the Appellate Court to establish a prima facie case that warrants interference. Referring to the present case, the High Court held that the appellant could not demonstrate that the conclusions arrived at by the learned Magistrate are so perverse or manifestly erroneous as to result in a miscarriage of justice. In the absence of such compelling grounds, the High Court declined to exercise its discretionary jurisdiction to grant leave to appeal. It is in these circumstances that the appellant has approached this Court by way of the present appeal assailing the legality and correctness of the impugned order of the High Court dated 12.06.2024.

Appellant victim under Section 2(wa) CrPC

It was submitted by Appellant Counsel that the appellant could also be construed to be a victim of the offence committed by the accused under Section 138 of the Act. If that is so, then as a victim the appellant has a right to assail the judgment of acquittal as per the proviso to Section 372 of the CrPC.

In such an event, the need for obtaining leave to file an appeal would not arise at all. In this regard, the proviso to Section 372 was contrasted with sub-section (4) of Section 378 of the CrPC.

Victim Suffered Financial Loss: Supreme Court

On a reading of the definition of ‘victim’, it is clear that the said expression is initially exhaustive and thereafter inclusive. The expression ‘victim’ means a person who has suffered any loss or injury. The loss or injury could be either physical, mental, a financial loss or injury. The expression injury could also be construed as a legal injury in a wider sense and not just a physical or a mental injury. The loss or injury must be caused by reason of an act or omission for which the accused person has been charged. Thus, it can be both by a positive act or negatively by an omission which is at the instance of the accused and for which such accused has been charged. Further, the expression ‘victim’ also includes his/her guardian or legal heir in the case of demise of the victim.

Order of Supreme Court

SC Held 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.