Reportability Reportable
Bench Division Bench (2)
Importance Notable
Result Appeal Allowed
Verified source: Supreme Court order dated 22.09.2026 in Criminal Appeal arising out of SLP (Crl.) No. 499 of 2026 — full text on Indian Kanoon. Bench, date, figures and directions checked against the judgment on 01.10.2026.
⚖ Case at a Glance
Case TitleSanu Varghese v. Shoukkathali
Citation2026 INSC 1053 · Crl. Appeal @ SLP (Crl.) No. 499 of 2026
Court & BenchSupreme Court — Justices J.B. Pardiwala & K. Vinod Chandran
Date of Decision22 September 2026
ProvisionSection 145, Negotiable Instruments Act, 1881 (read with Section 138)
OutcomeHigh Court’s remand set aside; revision restored to the High Court for decision on merits
ResultAppeal Allowed
Status: Good law as on the date of review — not reported as overruled or stayed.
Court Journey — Stage by Stage
Stage 109 Dec 2020Convicted
Judicial First Class Magistrate Court-III, Cherthala
In S.T. No. 115 of 2019, a complaint under Section 138 of the NI Act over a dishonoured cheque of ₹30 lakh, the Magistrate convicted the accused and imposed a fine of ₹33 lakh, with simple imprisonment for three months in default. The accused had been examined as DW-1.
Stage 216 Jun 2023Dismissed
Court of Session, Alappuzha
The accused’s Criminal Appeal No. 5 of 2021 was dismissed on merits and the conviction and sentence were confirmed. According to the High Court’s order, a joint compounding petition had been filed during the appeal.
Stage 301 Jul 2025Remanded
High Court of Kerala
In Crl.R.P. No. 715 of 2023, a Single Judge set aside both judgments on the short ground that the accused’s evidence as DW-1 had been recorded on affidavit, contrary to Mandvi Co-op. Bank, and remanded the case to the Magistrate to continue from the stage of defence evidence (2025:KER:47991).
Final22 Sep 2026Present JudgmentAllowed
Supreme Court of India
On the complainant’s appeal, the Supreme Court set aside the remand, restored the revision petition to the High Court’s file for decision on its own merits, and directed that any evidence recorded after the remand by examining the accused in person shall be eschewed.
Facts in Brief
The complainant’s case, as noticed by the Courts below, was that he had advanced ₹30 lakh to the accused (₹10 lakh by bank transfer and ₹20 lakh in cash) and received a cheque for ₹30 lakh, which was dishonoured for insufficiency of funds. The accused admitted his signature on the cheque but set up the defence that a signed blank cheque leaf had been given only as security for a loan of ₹10 lakh, and that the complainant was not in the station on the dates on which the cash was allegedly handed over.
The Magistrate found that no substantive evidence of the complainant’s absence had been produced and observed that the accused could have obtained the Call Data Records of the complainant’s mobile phone to establish it. The Magistrate convicted the accused, and the Sessions Court confirmed the conviction. In revision, the High Court remanded the matter solely because the accused’s own evidence had been received on affidavit.
Questions Before the Court
1
Whether the High Court could remand a completed Section 138 trial merely because the evidence of the accused had been taken on affidavit, relying on Mandvi Co-operative Bank Ltd. v. Nimesh B. Thakore, (2010) 3 SCC 83.
2
Whether such a procedural irregularity vitiates the trial when the accused never pleaded or showed any prejudice before the trial court or the appellate court.
What the Court Decided
The Supreme Court held that the dictum in Mandvi Co-op. Bank has to be applied in a criminal case with specific reference to the prejudice caused to the accused in a completed trial. Here the accused had never alleged prejudice before the Trial Court or the First Appellate Court; his signature on the cheque was admitted; and the statutory presumption applied squarely and had not been rebutted.
The Court observed that the plea was taken for the first time before the High Court and was erroneously accepted. It set aside the remand order and restored Crl.R.P. No. 715 of 2023 to the High Court, to be considered on its own merits with the other contentions of the accused kept open.
Directions / Final Order
- Remand order of the High Court of Kerala set aside.
- Crl.R.P. No. 715 of 2023 restored to the file of the High Court, to be decided on its own merits.
- Only the evidence led at the trial initially shall be considered; if the Trial Court has since examined the accused in person pursuant to the remand, that evidence shall be eschewed.
The Key Principle
Ratio / Key Principle
Section 145 of the NI Act permits only the complainant’s evidence to be given on affidavit, and Mandvi Co-op. Bank holds that the accused cannot be examined on affidavit. But in a criminal trial that has already concluded, that irregularity is to be tested on the touchstone of prejudice; where the accused never alleged prejudice at trial or in appeal, a remand for fresh defence evidence on that ground alone is not justified.
In the Court’s words, the plea of prejudice “looms large and is stark in the above case by its absence.”
Reasoning & Analysis
What Mandvi decided. The Court recalled that Mandvi Co-op. Bank, on a detailed consideration of Section 145, held that sub-section (1) enables only the complainant’s chief examination to be on affidavit, while sub-section (2) gives the Court discretion to summon a deponent, and makes it mandatory to do so if either side applies. It also drew a distinction between the complainant’s evidence and the accused’s defence evidence, which led to the conclusion that the accused cannot be examined on affidavit.
Prejudice is the test in a completed trial. The Court held that this dictum must be applied in a criminal case with reference to the prejudice caused to the accused. It noticed from the Magistrate’s order that the accused had in fact been examined as DW-1, had put forward his security-cheque defence and his plea about the complainant’s absence, and had simply failed to substantiate it.
No plea below, no remand above. Prejudice was never alleged before the Trial Court or the First Appellate Court. The signature was admitted and the presumption was not rebutted. The contention raised only in revision, described by the Court as a product of “the ingenuity of the lawyer”, could not justify undoing a completed trial.
Effect of the resumed trial. The respondent submitted that, after the remand, the trial had resumed at the stage of defence evidence and been completed. The Court held that this was of no consequence once the remand itself was set aside, and directed that any evidence recorded by examining the accused in person after the remand shall be eschewed.
How It Sits With Earlier Law
The order applies and explains M/s Mandvi Cooperative Bank Ltd. v. Nimesh B. Thakore, (2010) 3 SCC 83, on the scope of Section 145 of the NI Act. It does not dilute Mandvi; it adds that, in a concluded trial, the consequence of recording the accused’s evidence on affidavit depends on whether prejudice was pleaded and shown. The High Court had also relied on a Kerala High Court decision in Kalladikkattil Mohammed Jamal v. State of Kerala (2017), which the Supreme Court did not need to discuss.
How to Use This Judgment
For the defence: if the Magistrate proposes to take the accused’s evidence on affidavit, the objection should be raised at that stage and the prejudice pleaded specifically in the appeal; a bare technical plea taken for the first time in revision is unlikely to succeed after this order.
For the complainant: where a revisional court remands a completed Section 138 case only on the affidavit point, this order supports the submission that the remand is unsustainable in the absence of pleaded prejudice. Trial courts should in any case record the accused’s evidence in person, in line with Mandvi. This note is shared for general legal awareness and is not legal advice.
Statutes & Provisions
Section 145, NI Act, 1881Evidence of the complainant may be given on affidavit; Court may summon the deponent, and shall do so on application.India Code →
Section 138, NI Act, 1881Dishonour of cheque for insufficiency of funds.India Code →
Section 139, NI Act, 1881Presumption in favour of the holder that the cheque was received for discharge of a debt or liability.India Code →
