No Prejudice, No Retrial: Supreme Court Sets Aside Cheque-Bounce Remand Based on Accused's Affidavit Evidence

Case at a glance: The Supreme Court has set aside a Kerala High Court order that sent a Section 138 Negotiable Instruments Act case back for a fresh trial from the defence evidence stage. The High Court had relied on Mandvi Cooperative Bank v. Nimesh B. Thakore, (2010) 01 SC CK 0070, but the Supreme Court held that the principle must be applied with reference to prejudice in a completed trial, and here the accused had never pleaded prejudice before the trial or appellate court.

The appellant complained that a cheque for Rs 30 lakh issued by the respondent was dishonoured. The accused, examined as DW-1, admitted his signature but claimed that a signed blank cheque leaf had been given as security for a loan of Rs 10 lakh, and that the complainant was in Bengaluru on the dates he allegedly handed over a further Rs 20 lakh and received the cheque. The Magistrate noted that no substantive evidence of the complainant's absence was produced, and that call data records could have been obtained.

In revision, the High Court remanded the case for fresh trial from the defence evidence stage, relying on Mandvi, which held that only the complainant's chief examination may be on affidavit under Section 145 and that the accused may not ordinarily lead defence evidence by affidavit. By the time the appeal was heard, the respondent's counsel informed the Court that the resumed trial had been completed.

The Key Question Before the Court

Should a completed cheque-bounce trial be reopened only because the accused's defence evidence was taken in a manner Mandvi disapproves, when the accused never complained of prejudice?

Applying Mandvi With Reference to Prejudice

The Court read Mandvi as distinguishing the complainant's evidence, which may be given on affidavit, from the accused's evidence, which may not ordinarily be. But it held that this principle has to be applied with reference to the prejudice caused to the accused in a completed trial. Here, the signature was admitted, the presumption was not rebutted, and the accused “never alleged a prejudice before the Trial Court or before the First Appellate Court”.

Observing that the plea of prejudice was “stark in the above case by its absence”, the Court criticised the High Court for accepting a contention raised through the ingenuity of counsel and set aside the remand. Rather than deciding the revision itself, it restored the revision petition to the High Court for a decision on the merits, keeping the respondent's other contentions open.

What the Court Actually Held

• The High Court's remand order was set aside.
• Crl. R.P. No. 715 of 2023 was restored to the High Court to be decided on its own merits.
• Other contentions of the respondent were left open.
• Evidence from the initial trial is to be considered in the light of whether the accused was examined in person, as directed in para 9.

Why This Judgment Matters

• It prevents procedural objections raised late from undoing completed NI Act trials.
• It clarifies that Mandvi is applied with an eye on actual prejudice.
• It encourages accused persons to raise procedural objections at the earliest stage.

What Should Advocates Take Away From the Judgment?

For the Accused

• Object at trial if you are asked to give defence evidence on affidavit.
• Plead and show specific prejudice if you seek a retrial on this ground.

For Complainants

• Resist remand pleas where no prejudice was raised at trial or in appeal.
• Keep a record showing the accused's acquiescence in the procedure followed.

Key Takeaways

Frequently Asked Questions

Neither. It set aside the remand and sent the revision back to the High Court for decision on merits.

Under Mandvi, ordinarily not; but a breach is assessed with reference to prejudice in a completed trial.

Rs 30 lakh, though the accused said he had taken only a Rs 10 lakh loan.

Conclusion