The Supreme Court has ruled that a completed trial in a cheque-bounce case cannot be sent back for a fresh hearing merely because there was a procedural irregularity in the way defence evidence was handled, unless the accused can show that the lapse actually caused prejudice.
A bench comprising Justice JB Pardiwala and Justice K Vinod Chandran set aside a Kerala High Court order that had directed the case to be tried afresh from the stage of defence evidence.
The dispute arose from a prosecution under Section 138 of the Negotiable Instruments Act. The complainant alleged that the accused had issued a cheque that was subsequently dishonoured.
The accused maintained that he had handed over a signed blank cheque as security for a ₹10 lakh loan, but that the instrument was later presented for ₹30 lakh. He also disputed the complainant’s presence at the location where the alleged transaction and delivery of the cheque were said to have taken place.
The trial court found that the accused had not produced substantive material to support the claim regarding the complainant’s absence. It noted that Call Data Records could have been produced if the accused intended to establish where the complainant was at the relevant time.
Importantly, the accused had not raised any allegation of prejudice before either the trial court or the first appellate court.
Despite this, the Kerala High Court ordered the matter to be taken back to the stage of defence evidence. The High Court relied on the Supreme Court’s earlier ruling in M/s Mandvi Cooperative Bank Ltd. v. Nimesh B. Thakore, which examined the operation of Section 145 of the Negotiable Instruments Act.
The Supreme Court explained that the earlier decision concerned the manner in which evidence could be presented under Section 145. While a complainant could tender examination-in-chief through an affidavit, the same approach could not automatically be extended to an accused giving evidence in a criminal trial.
The bench, however, said that such a procedural principle could not be applied mechanically after a trial had already been completed. The crucial question was whether the accused had suffered actual prejudice because of the alleged irregularity.
In this case, the Court found no such prejudice had been established. The accused had admitted his signature on the cheque and had failed to displace the statutory presumption arising under the Negotiable Instruments Act.
The Court observed that the absence of any plea of prejudice before the lower courts was significant. It held that the issue was raised before the High Court only later and that the procedural objection, by itself, did not justify reopening the completed proceedings.
The Supreme Court therefore cancelled the High Court’s remand order. The criminal revision has been restored to the High Court for consideration on its merits.
