Sanu Varghese Vs Shoukkathali (Supreme Court of India)
Affidavit Evidence by Cheque Accused: Supreme Court Rejects Retrial Without Any Plea of Prejudice
SEO Title: Retrial Not Justified Without Plea of Prejudice in Cheque Case: Supreme Court
Cases Discussed
- M/s Mandvi Cooperative Bank Limited v. Nimesh B. Thakore — Supreme Court considered Section 145 of the NI Act and held that the statutory facility permitting the complainant’s examination-in-chief by affidavit cannot be extended to permit the accused to give his own evidence on affidavit.
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Sanu Varghese v. Shoukkathali, Criminal Appeal arising out of SLP (Crl.) No. 499 of 2026, 2026 INSC 1053, order dated 22 September 2026
Can an accused in a cheque dishonour case obtain a fresh trial by pointing, for the first time in revision, to an error in the manner in which defence evidence was recorded? The Supreme Court considered that question in Sanu Varghese v. Shoukkathali. It set aside a High Court order directing a retrial from the stage of defence evidence because the accused had never claimed that the procedure caused him prejudice before the Trial Court or the First Appellate Court.
The case arose under Section 138 of the Negotiable Instruments Act, 1881. The complainant relied on a cheque for ₹30 lakh. The accused admitted his signature but contended that he had given a signed blank cheque as security for a loan of only ₹10 lakh, which had been transferred to his account. He disputed the complainant’s account of an additional ₹20 lakh payment. He also claimed that the complainant was in Bengaluru on the relevant dates and therefore could not have handed over the alleged amount as stated.
The Trial Court considered that defence. It noted that the accused had produced no substantive evidence to establish the complainant’s absence on the dates in question. For instance, he could have sought call data records to support his claim about the complainant’s location. With the signature on the cheque admitted, the Court found that the applicable statutory presumption had not been rebutted.
The procedural objection emerged later. In revision, the High Court relied on the Supreme Court’s earlier decision in M/s Mandvi Cooperative Bank Ltd. v. Nimesh B. Thakore and remanded the matter for a fresh trial from the stage of defence evidence. The complainant challenged that remand before the Supreme Court.
The point concerning Section 145 of the NI Act is important. The provision permits the complainant’s evidence to be given by affidavit. In Mandvi Cooperative Bank, the Supreme Court had explained that this permission could not simply be extended to allow an accused to give his own examination by affidavit. The complainant’s affidavit evidence can also be tested through examination in person in accordance with Section 145(2).
The Supreme Court did not discard that earlier ruling. Its focus was on the consequence of the procedural error in a trial that had already been completed. The accused had not told the Trial Court or the First Appellate Court that the manner of recording his evidence had impaired his defence. Nor had he identified any actual prejudice when seeking the remand. The Court held that a late procedural objection, without such a plea, did not justify reopening the trial in the circumstances of this case.
The Court also rejected the suggestion that the retrial should stand merely because, following the High Court’s direction, proceedings had reportedly resumed and been completed again. Once the remand order was found unsustainable, those later proceedings could not supply a reason to preserve it. The Supreme Court directed that only the evidence from the original trial be considered; if the accused had subsequently been examined in person pursuant to the remand, that later evidence was to be excluded.
The appeal was accordingly allowed, the High Court’s remand order was set aside, and Criminal Revision Petition No. 715 of 2023 was restored to the High Court for consideration on its own merits. The Supreme Court expressly left the accused’s other contentions available in that revision. It did not finally dispose of every challenge to the underlying Section 138 case.
Author’s comment: The judgment preserves the distinction drawn in Mandvi Cooperative Bank between complainant and accused affidavit evidence. At the same time, it asks whether an error raised after a completed trial actually warrants a retrial. Where the accused participated without asserting prejudice and raised the point only in revision, the Supreme Court declined to send the case back for fresh defence evidence. The remaining grounds must now be examined by the High Court on the original trial record.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
Leave granted.
2. The appellant is the complainant, and the respondent is the accused in a proceeding initiated under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). The appellant is aggrieved with the impugned order of the High Court in revision which remanded the matter for fresh trial from the stage of defence evidence. The ground on which the remand was made was the decision of this Court in M/s Mandvi Cooperative Bank Limited v. Nimesh B. Thakore1.
3. We heard Mr. Babu Joseph K., learned Counsel for the appellant and Mr. Raghenth Basant, learned Senior Counsel appearing for the respondent.
4. The issue, in a narrow compass, is as to whether the remand order was proper on the ground raised at the stage of revision, when there is no plea of prejudice taken by the accused. The cited decision, on a detailed consideration of Section 145 of the NI Act held that sub-section (1) provides that the evidence of the complainant may be given by him on affidavit which was also to be read in evidence in any enquiry, trial or other proceeding under the Cr.PC, subject to all just exceptions. The provision enables only the complainant’s chief examination to be in affidavit. As far as sub-section (2) is concerned, it was held to be a discretion of the Court to call a person giving evidence to do so on affidavit and to examine him as to the facts contained therein. However, if any application is made, either by the prosecution or by the accused that the person giving his evidence on affidavit should be called in person, to be again examined as to the facts contained therein, it must be done.
5. True, this Court found a distinction between the nature of the complainant’s evidence and the evidence of the accused in a case of dishonoured cheque, in paragraph 48. The nature of the evidence of the defence may not necessarily be documentary and the defence would adduce other kinds of evidence to rebut the presumption, that the issuance of the cheque was not in discharge of any debt or liability, was the finding, which led to the conclusion that the accused cannot be permitted to be examined on affidavit.
6. The dictum has to be applied in a criminal case, specifically with reference to the prejudice caused to the accused in a completed trial. In the present case, the reading of the order of the learned Magistrate would indicate that the accused, examined as DW-1 contended that a signed blank cheque leaf was given as security for loan of Rs.10 lakhs, transferred by the complainant to the account of the accused. The cheque presented was for an amount of Rs.30 lakhs. It was also the contention of the accused that on the alleged date of handing over of Rs.20 lakhs and on the date on which the cheque was issued; the evidence of PW-1, the complainant having been corroborated by PW-2, the complainant was not in station and was at Bengaluru. However, no substantive evidence regarding the unavailability of the complainant was proffered before Court. The learned Magistrate clearly observed that the accused could very well have obtained the Call Data Records (CDRs) of the mobile of the complainant to establish his absence.
7. 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.
8. 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.
9. The learned Senior Counsel appearing for the respondent would submit that in fact, the trial was resumed at the stage of defence evidence and completed. But that is of no consequence when we set aside the order of the learned Single Judge impugned in this appeal, which we do set aside. As pointed out by the learned Senior Counsel, still the other contentions are available. In these circumstances, we restore Crl. R.P. No.715 of 2023 to the files of the High Court, which shall be considered on its own merits.
However, the evidence led at the trial initially shall only be considered, if at all, the Trial Court has examined the accused in person, subsequently the same shall be eschewed.
10. The appeal stands allowed.
11. Pending application(s), if any, shall stand rejected.
