Sanu Varghese v. Shoukkathali | 2026 INSC 1053 | 22 September 2026
What the case was about
This appeal concerned a private complaint under Section 138 of the Negotiable Instruments Act, 1881 (NI Act), the statute that criminalises the dishonour of a cheque. After the trial court concluded the entire proceedings — during which the accused had been examined as a defence witness — the respondent-accused approached the High Court by way of criminal revision. Relying on the Supreme Court’s earlier decision in M/s Mandvi Cooperative Bank Limited v. Nimesh B. Thakore, (2010) 3 SCC 83, the High Court remanded the matter for a fresh trial from the stage of defence evidence (para 2). The complainant-appellant challenged this order before the Supreme Court, contending that the accused had never complained about the mode of recording evidence during the trial or in the first appeal. The Court was therefore asked to decide whether a completed trial could be dismantled years later at the revision stage on a procedural point raised for the very first time — long after the accused had already been examined and the trial had run its full course (para 4).
The key facts
The complainant, Sanu Varghese, lodged a complaint under Section 138 against Shoukkathali for dishonouring a cheque (para 2). Before the trial court, the accused took the stand as DW-1 and contended that he had handed over a signed blank cheque leaf merely as security for a loan of ₹10 lakh, whereas the cheque later presented for payment was for ₹30 lakh (para 6). He also alleged that on the dates relevant to the transaction, the complainant was out of station in Bengaluru (para 6). However, no substantive evidence regarding the complainant’s unavailability was proffered before the trial court (para 6). Crucially, as the trial unfolded and even when the matter travelled to the First Appellate Court, the accused never raised any plea that he had suffered prejudice because his evidence was recorded on affidavit rather than in person. This argument surfaced only before the High Court, which then remanded the matter (paras 2, 7).
The questions before the Court
The Supreme Court framed the central issue in narrow terms: whether a remand for fresh trial could be justified at the revision stage when the accused had failed to raise any plea of prejudice before the trial court or the first appellate court (para 4). The Court also had to examine whether the distinction drawn in Mandvi Cooperative Bank regarding Section 145 of the NI Act — which permits complainants to file their chief evidence on affidavit while leaving the accused’s evidence ordinarily to be recorded in person — could form an automatic basis for remanding a case that had already run its full course, absent any demonstration of actual harm to the accused (paras 4–5). In essence, the question was whether a procedural precedent could be invoked mechanically to order a do-over, or whether its application required proof of real prejudice.
What the Court decided and why
Allowing the appeal, a bench of Justices J.B. Pardiwala and K. Vinod Chandran set aside the High Court’s remand order.
The judgment begins by carefully parsing the law laid down in Mandvi Cooperative Bank. The Court noted that under Section 145(1) of the NI Act, a complainant may give evidence on affidavit, and that such an affidavit is to be read in evidence subject to all just exceptions. The earlier decision had drawn a distinction between the nature of the complainant’s evidence and that of the accused, holding that an accused may need to adduce non-documentary evidence to rebut the statutory presumption under the NI Act, and therefore cannot ordinarily be permitted to be examined on affidavit (para 5).
However, the bench cautioned that this dictum “has to be applied in a criminal case, specifically with reference to the prejudice caused to the accused in a completed trial” (para 6). On the facts before it, the Court found that the accused had admitted his signature on the dishonoured cheque, and the statutory presumption that it was issued in discharge of a debt or liability had not been rebutted (para 7). More importantly, the accused had never alleged any prejudice before the trial court or the first appellate court regarding the mode of recording evidence (para 7). The Supreme Court noted that the plea was entirely absent when it mattered: “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” (para 8).
Consequently, the Court held that the Mandvi Cooperative Bank principle cannot be used as a mere procedural formality or a tactical device to secure a remand. It must be applied with close attention to whether the accused actually suffered prejudice in a completed trial. Since no prejudice was demonstrated — and since the accused had not even whispered such a plea until the revision stage — the remand was improper.
The Court restored Criminal Revision Petition No. 715 of 2023 to the High Court for consideration on its own merits, but laid down a critical safeguard: only the evidence led at the initial trial shall be considered, and any evidence recorded after the impugned remand — such as an in-person examination of the accused, if that had subsequently occurred — must be eschewed (para 9). This ensures that the accused does not benefit from the High Court’s erroneous remand by adding new material that was never part of the original trial record, and preserves the integrity of the trial process. The appeal was accordingly allowed (para 10).
Why it matters
The ruling reinforces that procedural rights must be asserted in a timely manner and cannot be deployed as afterthoughts to unravel a finished trial. By holding that an accused must demonstrate actual prejudice and cannot raise abstract technical objections for the first time in revision, the Supreme Court has bolstered the principle of finality in criminal proceedings. The judgment makes clear that even well-settled precedents governing the recording of evidence under special statutes such as the NI Act cannot be invoked mechanically; their application must remain sensitive to the facts on record, the stage of proceedings, and the crucial question of whether any real harm was suffered. For litigants, it is a signal that courts will not permit do-overs based on legal ingenuity alone. For the trial and appellate judiciary, the decision affirms that procedural safeguards are meant to ensure a fair hearing, not to provide an endless loop of re-litigation once a trial has fairly run its course.