Have you only tried this one chm file? Or does this problem occur with all your chm files? Maybe the problem lies in the file itself and not with the pocketbook.
It is "fbreader" that is able to read chm files on the Pocketbook 903. You could try fbreader180, too.
Here is a thread from the German part of this forum which covers converting chm files:
https://www.mobileread.com/forums/showthread.php?t=70148
It is in German but you only need to follow the links. Last post of this thread mentions that you can convert chm to epub directly in Calibre with the latest version. (And if this conversion fails you can be quite sure that the problem is with the file). It's also possible to convert via Mobipocket Creator, the result will then be a mobi file.
Good luck!