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Case Snapshot
Case Name: Sanu Varghese v. Shoukkatthali
Citation: 2026 INSC 1053
Bench: Justice J.B. Pardiwala and Justice K. Vinod Chandran
Date of Judgment: September 22, 2026
Area of Law: Criminal Procedure — Section 138 of the Negotiable Instruments Act, 1881 — Section 145 NI Act — Remand — Prejudice
The Judgment in One Line
The Supreme Court held that a remand for fresh trial from the defence stage in a Section 138 NI Act case is improper when the accused never pleaded prejudice and the signature and statutory presumption remained unrebutted.
Why this Judgement Matters
This judgment clarifies that the decision in Mandvi Cooperative Bank v. Nimesh B. Thakore does not automatically entitle an accused to a remand for fresh trial. The Supreme Court emphasised that procedural irregularities must cause actual prejudice to the accused before a completed trial can be reopened. The ruling prevents the misuse of remand powers to delay proceedings and ensures that High Courts exercise revisional jurisdiction with due regard to the absence of prejudice. It will guide courts in Section 138 NI Act cases where the complainant’s evidence was given on affidavit and the accused later seeks to recall the complainant.
Background
The appellant was the complainant, and the respondent was the accused in a proceeding under Section 138 of the Negotiable Instruments Act, 1881. The High Court, in revision, remanded the matter for fresh trial from the stage of defence evidence, relying on Mandvi Cooperative Bank Limited v. Nimesh B. Thakore.
The case involved a dishonoured cheque. The accused, examined as DW-1, contended that a signed blank cheque leaf was given as security for a loan of Rs. 10 lakhs, whereas the cheque presented was for Rs. 30 lakhs. The accused also claimed that the complainant was not in station on the alleged date of handing over Rs. 20 lakhs and the date of issuance of the cheque. However, no substantive evidence was produced to prove the complainant’s unavailability. The Magistrate observed that the accused never alleged prejudice before the Trial Court or the First Appellate Court. The signature was admitted, and the presumption under the NI Act applied and was not rebutted. The High Court accepted the accused’s contention and remanded the matter. The complainant appealed to the Supreme Court.
Issues Before the Court
Whether the High Court’s remand order for fresh trial from the defence stage was proper when the accused had not pleaded prejudice.
Whether Mandvi Cooperative Bank mandates remand in every case where the complainant’s evidence was given on affidavit.
Whether the absence of a plea of prejudice vitiates the remand order.
What Did the Supreme Court Hold?
Remand Was Improper
The Supreme Court set aside the High Court’s remand order.
The Court noted that Mandvi Cooperative Bank held that Section 145(1) of the NI Act permits the complainant’s evidence to be given on affidavit. Sub-section (2) gives the Court discretion to call a person giving evidence on affidavit for examination. However, if an application is made by the prosecution or the accused that the person giving evidence on affidavit should be called in person, it must be done.
The Court also noted the distinction drawn in Mandvi Cooperative Bank between the complainant’s evidence and the accused’s evidence. The accused cannot be permitted to be examined on affidavit.
Prejudice Must Be Pleaded and Proved
The dictum in Mandvi Cooperative Bank must be applied in a criminal case with specific reference to the prejudice caused to the accused in a completed trial.
In the present case, the accused never alleged prejudice before the Trial Court or the First Appellate Court.
The signature on the cheque was admitted. The statutory presumption under the NI Act applied squarely and was not rebutted.
The plea of prejudice was starkly absent. The High Court erroneously accepted the contention raised by the accused at the revision stage.
Restoration of Revision Petition
The Supreme Court restored Criminal Revision Petition No. 715 of 2023 to the files of the High Court for consideration on its own merits.
The Court directed that the evidence led at the trial initially shall only be considered if the Trial Court has examined the accused in person. If the accused was subsequently examined, that evidence shall be eschewed.
Key Legal Principles
Prejudice is essential for remand: A remand for fresh trial is improper when the accused never pleaded or proved prejudice.
Mandvi Cooperative Bank is not automatic: The decision does not entitle an accused to remand in every case where the complainant’s evidence was on affidavit. It must be applied with reference to prejudice.
Section 145 NI Act: Sub-section (1) allows the complainant’s evidence on affidavit. Sub-section (2) gives discretion to the Court to call the person for examination. If an application is made, it must be allowed.
Accused cannot be examined on affidavit: The accused cannot be permitted to give evidence on affidavit in a Section 138 NI Act case.
Statutory presumption: Admission of signature triggers the presumption under the NI Act. The burden shifts to the accused to rebut it.
Completed trial not to be reopened lightly: A completed trial should not be reopened unless prejudice is demonstrated.
High Court’s revisional jurisdiction: The High Court must consider the revision on merits, keeping in mind the absence of prejudice.
Important Precedents
Mandvi Cooperative Bank Limited v. Nimesh B. Thakore (2010): Held that Section 145(1) permits the complainant’s evidence on affidavit, and sub-section (2) gives discretion to the Court to call the person for examination. Distinguished and limited by the present case.
Practical Impact
For advocates, this judgment provides a clear precedent that a remand for fresh trial in a Section 138 NI Act case is not automatic. The accused must plead and prove prejudice. The ruling will be cited in revision petitions where the accused seeks remand solely on the ground that the complainant’s evidence was on affidavit. For litigants, it reinforces that completed trials will not be reopened without a demonstrated prejudice. For law students, it illustrates the application of the prejudice doctrine in procedural irregularities.
Lawcurb Quick Insight
The judgment highlights that even if a procedural irregularity exists, the absence of prejudice means no remand. The accused’s failure to raise prejudice at the earliest stage is fatal to the claim for remand.
Lawcurb Practice Note
When seeking remand in a Section 138 NI Act case, always plead and prove prejudice caused by the procedure adopted. Do not rely solely on Mandvi Cooperative Bank; establish how the procedure actually prejudiced the defence.
Remember this Ratio
A remand for fresh trial in a Section 138 NI Act case is improper when the accused never pleaded prejudice and the signature and statutory presumption remained unrebutted.
Final Outcome
The Supreme Court allowed the appeal.
The High Court’s order remanding the matter for fresh trial was set aside.
Criminal Revision Petition No. 715 of 2023 was restored to the High Court for consideration on merits.
The evidence led at the trial initially shall only be considered if the Trial Court examined the accused in person; otherwise, it shall be eschewed.
Pending applications were rejected.
Lawcurb Verdict
This judgment is a significant clarification on the application of Mandvi Cooperative Bank in Section 138 NI Act cases. By setting aside the remand and emphasising the requirement of prejudice, the Supreme Court has prevented the automatic reopening of completed trials. The ruling will guide High Courts in exercising revisional jurisdiction and ensure that procedural irregularities do not become tools for delay. A pragmatic and legally sound order.
Exam Lens
Question 1: What did the Supreme Court hold in Mandvi Cooperative Bank v. Nimesh B. Thakore?
Answer: In Mandvi Cooperative Bank, the Supreme Court held that Section 145(1) of the NI Act permits the complainant’s evidence to be given on affidavit. Sub-section (2) gives the Court discretion to call the person giving evidence on affidavit for examination. If an application is made by the prosecution or the accused, it must be allowed. The Court also held that the accused cannot be permitted to be examined on affidavit.
Question 2: When can a remand be ordered in a Section 138 NI Act case?
Answer: A remand for fresh trial can be ordered only if the accused pleads and proves prejudice caused by the procedure adopted. The decision in Mandvi Cooperative Bank does not automatically entitle the accused to remand. The Court must apply the dictum with reference to the prejudice caused to the accused in a completed trial.
Question 3: What is the role of prejudice in procedural irregularities?
Answer: Prejudice is essential for remand. Even if a procedural irregularity exists, the accused must demonstrate actual prejudice. The absence of a plea of prejudice is fatal to the claim for remand. The Court will not reopen a completed trial unless prejudice is shown.
This report is prepared by Lawcurb for educational and informational purposes only. It is a concise summary of the judgment and should not be construed as legal advice. Readers are encouraged to refer to the original judgment before relying on any legal proposition.