The Supreme Court has held that a completed trial under Section 138 of the Negotiable Instruments Act cannot be remanded back to trial merely on the ground that the procedure relating to defence evidence was not followed, particularly when the accused has not demonstrated any prejudice.

A bench of Justice JB Pardiwala and Justice K Vinod Chandran set aside the Kerala High Court's decision to order a fresh trial from the stage of defence evidence despite no ground urged by the accused before the trial court and First Appellate Court about the prejudice caused to him.

The appellant was the complainant in a cheque-bounce case. The accused claimed that he had issued a signed blank cheque as security for a ₹10 lakh loan, whereas the cheque was presented for ₹30 lakh.

He also claimed that the complainant was not present at the relevant place when the alleged payment and issuance of the cheque took place. However, no substantive evidence was produced to establish the complainant's absence. The Magistrate noted that the accused could have produced the complainant's Call Data Records to support this claim.

The accused did not allege any prejudice before the Trial Court or the First Appellate Court.

The High Court nevertheless remanded the matter for a fresh trial from the stage of defence evidence, relying on the Supreme Court's ruling in M/s Mandvi Cooperative Bank Ltd. v. Nimesh B. Thakore (2010), which dealt with the scope of Section 145 of the NI Act.

The bench explained that Mandvi Cooperative Bank had interpreted Section 145 of the NI Act and held that while the complainant's examination-in-chief could be given by affidavit, the accused could not be permitted to give evidence on affidavit in the same manner.

However, the Court stressed that the principle had to be applied in a criminal case with particular reference to the prejudice caused to the accused in a completed trial.

In the present case, since the accused had never alleged prejudice before the Trial Court or the First Appellate Court and had admitted the cheque signature and had failed to rebut the statutory presumption under the NI Act, the Court found no basis for the remand.

“The accused never alleged a prejudice before the Trial Court or before the First Appellate Court. The signature was admitted and the presumption applies squarely which has not been rebutted...Before the High Court, the accused has merely by reason of the ingenuity of the lawyer, taken a contention which was erroneously accepted by the learned Single Judge, according to us. The plea of prejudice looms large and is stark in the above case by its absence.”, the Court observed.

The High Court's remand order was accordingly set aside, and the criminal revision was restored on the High Court's file for consideration on its merits.

Cause Title: Sanu Varghese Versus Shoukkathali

Citation : 2026 LiveLaw (SC) 989

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Appearance:

For Petitioner(s) :Mr. Babu Joseph K., Adv. Mr. Boby Augustine, Adv. Ms. Iram Naaz, Adv. M/s Lawfic, AOR Ms. Ananya Bhardwaj, Adv. Mr. Udhay Krishnan, Adv.

For Respondent(s) :Mr. Raghenth Basant, Sr. Adv. Mr. Sarath S Janardanan, AOR Mr. Dheerendrakrishnan, Adv. Ms. NP Asha, Adv. Mr. Feroze, Adv. Ms. Hima Bhardwaj, Adv. Ms. Vishnupriya P Govind, Adv.