The Supreme Court has held that an NI Act Trial Remand cannot be ordered merely because of a procedural lapse concerning defence evidence. The ruling arose from a completed trial under Section 138 of the Negotiable Instruments Act. The Court stressed that the accused must demonstrate actual prejudice caused by the procedural lapse.
A bench comprising Justice JB Pardiwala and Justice K Vinod Chandran set aside the Kerala High Court’s direction for a fresh trial from the stage of defence evidence. The bench noted that the accused had not raised any plea of prejudice before the Trial Court or the First Appellate Court.
Dispute Over ₹30 Lakh Cheque
The appellant was the complainant in a cheque-bounce case.
The accused claimed that he had given a signed blank cheque as security for a ₹10 lakh loan. However, the complainant presented the cheque for ₹30 lakh.
The accused also claimed that the complainant was not present at the relevant place. According to him, the alleged payment and issuance of the cheque occurred in the complainant’s absence.
However, the accused did not produce substantive evidence to support this claim.
The Magistrate noted that he could have produced the complainant’s Call Data Records to establish the alleged absence.
Kerala High Court Ordered Fresh Trial
Nevertheless, the Kerala High Court sent the matter back for a fresh trial from the stage of defence evidence.
The High Court relied on the Supreme Court’s decision in M/s Mandvi Cooperative Bank Ltd. v. Nimesh B. Thakore (2010). That judgment dealt with the scope of Section 145 of the Negotiable Instruments Act.
The Supreme Court explained that Mandvi Cooperative Bank interpreted Section 145 and considered the procedure for recording evidence under the NI Act.
Under that ruling, a complainant may submit examination-in-chief through an affidavit. However, an accused cannot tender evidence through an affidavit in the same manner.
Court Stresses Need To Establish Prejudice
The Supreme Court clarified that courts must examine whether the procedure actually caused prejudice to the accused.
This consideration assumes particular significance when the trial has already concluded.
In the present case, the accused never raised a plea of prejudice before the Trial Court. Nor did he raise such a contention before the First Appellate Court.
Moreover, the accused admitted his signature on the cheque. Therefore, the statutory presumption under the NI Act applied.
The Court found that the accused had failed to rebut that presumption. Consequently, it found no justification for ordering a fresh trial.
The bench observed:
“The accused never alleged a prejudice before the Trial Court or before the First Appellate Court. The signature was admitted and the presumption applies squarely which has not been rebutted…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.”
Supreme Court Sets Aside Remand Order
The Supreme Court found no basis for the NI Act Trial Remand ordered by the Kerala High Court. The accused had failed to establish that the procedure adopted during the trial caused him prejudice.
Accordingly, the Supreme Court set aside the Kerala High Court’s remand order.
The Court restored the criminal revision to the Kerala High Court’s file for consideration on its merits.
