Official Liquidator of Vs Dr. Mahesh K. Menone — Cheque Dishonour | Karnataka HC (2026)

Official Liquidator of Vs Dr. Mahesh K. Menone — Cheque Dishonour | Karnataka HC (2026)

What the court decided

AI extract

Outcome

Appeal disposed of with directions: Registry to transfer the entire record, including requisitioned trial court copies, to the concerned Principal District & Sessions Judge for assignment to the jurisdictional appellate Court; transferee court to issue notice to both parties and proceed in accordance with law; pending applications (including condonation of delay) to be transferred and considered by the transferee Court; appellate Court requested to dispose of the matter expeditiously; appellant permitted to amend the cause-title and provisions thereof; no observations on merits, rights and contentions left open.

Issue for consideration

Whether the criminal appeal filed by the complainant (Official Liquidator) under Section 378(4) Cr.P.C. against the judgment of acquittal in a Section 138 NI Act case should be entertained by the High Court, or transferred to the Sessions Court to be dealt with as an appeal under the proviso to Section 372 Cr.P.C. / proviso to Section 413 BNSS, 2023, in light of Celestium Financial v. A Gnanasekaran.

Court's answer

In light of the Supreme Court's clarification in Celestium Financial, the appellant, being the complainant under Section 138 of the Negotiable Instruments Act, 1881, is entitled to file an appeal against the judgment of acquittal before the Sessions Court, since he is considered to be a victim.

Ratio / Principle

If the High Court were to proceed to hear and decide the appeal at that stage, it could deprive the parties of the High Court as an available forum for further challenge; therefore the appeal ought to be pursued before the Sessions Court.

Key takeaways

The present appeal is to be transferred to the concerned appellate Court of Sessions and considered as an appeal under the proviso to Section 413 of BNSS, 2023 (formerly Section 372 of Cr.P.C.) and numbered accordingly.ratio¶38
The Court has made no observations on the merits of the case; all rights and contentions of the parties are left open to be agitated before the court concerned.obiter¶48

Detailed headnote1 paragraphs

Criminal Appeal (CRL.A No. 1554 of 2022) under Section 378(4) Cr.P.C. by the complainant (Official Liquidator of M/s. Magnum Intergrafiks Private Limited (In Liqn.)) against judgment of acquittal dated 31.03.2021 in C.C.No.405/2014 (offence under Section 138, Negotiable Instruments Act, 1881) passed by the IV Addl. Civil Judge & JMFC, Mangaluru — relying on Celestium Financial v. A Gnanasekaran, 2025 SCC OnLine SC 1320 (para 10), whereunder a victim-complainant may prefer an appeal under the proviso to Section 372 Cr.P.C. without resorting to Section 378(4), and noting similar views of the Andhra Pradesh, Madhya Pradesh, Chhattisgarh, Delhi High Courts and coordinate benches of the Karnataka High Court — held that the complainant under Section 138 NI Act, being a victim, is entitled to appeal against acquittal before the Sessions Court, and that hearing the appeal in the High Court would deprive the parties of the High Court as a further forum; appeal disposed of with direction to transfer the entire record to the Principal District & Sessions Judge for assignment to the jurisdictional appellate Court, to be treated and numbered as an appeal under the proviso to Section 413 BNSS, 2023 (formerly Section 372 Cr.P.C.); transferee court to issue notice; pending applications transferred; expeditious disposal requested; liberty to amend cause-title; no observations on merits, all rights and contentions left open. (G Basavaraja J.; decided 09.02.2026)