Here is the best way to make the jqgrid header checkbox work.
If you see the html code, there is a div tag surrounding the input tag that the class has - ui-jqgrid-sortable. This prevents the checkbox from being checked.
Remove it, it works as you expected.
Solution below
Add id to checkbox
<input type="checkbox" id="hdrCbox" onclick="checkBox(event)" />
when initializing the grid or form, add the line below.
$('#hdrCbox').parent().removeClass('ui-jqgrid-sortable');
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