Supreme Court Sets Aside Remand in Cheque Bounce Case as Accused Never Claimed Prejudice

Sanu Varghese v. Shoukkathali 2026 INSC 1053 Decided 22 September 2026

Published: 25 September 2026 · NyayVidhan · 3 min read

The Supreme Court set aside a High Court order that had remanded a cheque-dishonour case under Section 138 of the Negotiable Instruments Act for fresh trial from the defence-evidence stage. The remand relied on Mandvi Cooperative Bank v. Nimesh B. Thakore, under which an accused cannot be examined on affidavit. The Court held that the ruling must be applied with reference to prejudice, which the accused had never pleaded, and restored the revision for a decision on its merits (paras 6-9).

Supreme Court Sets Aside Remand in Cheque Bounce Case as Accused Never Claimed Prejudice

File photo: Supreme Court of India, New Delhi Photo: Subhashish Panigrahi Source: Wikimedia Commons Licence: CC BY-SA 4.0

Judgment Intelligence

Petition Allowed

Sanu Varghese v. Shoukkathali

2026 INSC 1053

Criminal Appeal arising out of SLP (Crl.) No. 499 of 2026

Court: Supreme Court of India
Date of Decision: 22 September 2026
Bench: Justices J.B. Pardiwala and K. Vinod Chandran
Relevant Acts & Sections: Negotiable Instruments Act, 1881 — Sections 138, 145

Final Outcome

Appeal allowed. The High Court's remand order was set aside and Crl. R.P. No. 715 of 2023 restored to its file, to be decided on its own merits on the evidence led at the trial initially; any later examination of the accused in person is to be eschewed (paras 9-10).

Source Supreme Court of India, decided 22 September 2026

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Key holdings

Mandvi Cooperative Bank's bar on examining an accused on affidavit is applied with reference to prejudice to the accused in a completed trial (para 6).
The accused never alleged prejudice before the Trial Court or the First Appellate Court, and his signature on the cheque was admitted (para 7).
A contention first raised in revision, with no plea of prejudice, could not justify remanding the case for fresh trial (paras 4, 8).
Only the evidence first led at trial is to be considered; any later examination of the accused in person is to be eschewed (para 9).

Judgment digest by NyayVidhan: a summary of the court's judgment, not its text. The judgment itself is the authoritative version.

Brief Facts

Sanu Varghese filed a complaint under Section 138 of the NI Act against Shoukkathali (para 2). At trial, the accused, examined as DW-1, said he had given a signed blank cheque leaf as security for a Rs. 10 lakh loan; the cheque was presented for Rs. 30 lakh. He also claimed the complainant was in Bengaluru on the dates of the alleged Rs. 20 lakh payment and of the cheque, but offered no substantive evidence. The Magistrate noted that he could have obtained the complainant's call data records (para 6). In revision, the High Court remanded the case for fresh trial from the defence-evidence stage, relying on Mandvi Cooperative Bank (para 2).

Court's Findings

The issue was narrow: whether the remand was proper on a ground raised only in revision, when the accused had taken no plea of prejudice (para 4). Mandvi Cooperative Bank read Section 145 of the NI Act as allowing only the complainant's examination-in-chief on affidavit, subject to the right to have a deponent called for examination in person (para 4). It distinguished defence evidence, which may not be documentary, and concluded that an accused cannot be examined on affidavit (para 5). The Court held that this dictum has to be applied in a criminal case with specific reference to the prejudice caused to the accused in a completed trial (para 6). Here, the accused never alleged prejudice before the Trial Court or the First Appellate Court. His signature on the cheque was admitted, and the Court observed that the presumption applied and had not been rebutted (para 7). The contention was raised only before the High Court and erroneously accepted there: "The plea of prejudice looms large and is stark in the above case by its absence" (para 8). That the resumed trial had since been completed was of no consequence (para 9).

Legal Principle

Mandvi Cooperative Bank's rule that an accused cannot be examined on affidavit must be applied with reference to the prejudice caused to the accused in a completed trial. Absent any plea of prejudice at trial or in the first appeal, a revisional court should not remand on that ground alone (paras 6-8).

Precedents Relied Upon

M/s Mandvi Cooperative Bank Limited v. Nimesh B. Thakore (2010) 3 SCC 83
Explained Discussed at ¶ 2, 4-6
Under Section 145 of the NI Act only the complainant, not the accused, may give evidence on affidavit; the Court held that this rule must be applied with reference to prejudice caused to the accused in a completed trial.