Supreme Court says accused must be heard before remand.

The Supreme Court recently observed that when a high court sets aside an order refusing to take cognizance of a criminal complaint and remands the matter for fresh consideration, the accused must be heard as such an order necessarily causes prejudice to the person against whom allegations have been made.

A Bench of Justices J B Pardiwala and K Vinod Chandran made the observation while allowing an appeal filed by Sandeep Shukla. The Bench found that the Allahabad High Court had failed to issue notice to Shukla before setting aside an order refusing cognizance, thereby causing prejudice to him.

Why did the Supreme Court say the accused must be heard?

Court said that although the accused may have no right to be heard at the pre-cognizance stage, the position changes when the high court sets aside an order refusing cognizance and remands the matter.

"Apparently, the appellant herein, impleaded as respondent, was not heard by the high court. In fact, the high court dispensed with the notice to the 2nd respondent since he had no right to be heard at the pre-cognizance stage. The high court should have noticed that if a remand is made, setting aside the order refusing cognizance, then that would necessarily prejudice the person against whom allegations are raised," the Bench said.

The case arose out of a dispute concerning an alleged payment of Rs 10 lakh for the sale of a flat. The complainant alleged that he had paid the amount in two instalments, but neither was the money returned nor was the flat sold to him.

He further alleged that Shukla had called him on the pretext of refunding the money and assaulted him.

Criminal proceedings cannot be used to recover money

The Supreme Court also stressed that a dispute involving a money transaction cannot automatically be turned into a criminal case when the appropriate remedy is to seek recovery through a civil suit.

"If there is a money transaction and the appellant has a demand for its return, the remedy is not to initiate criminal proceedings but to file a civil suit for recovery," the Bench said.

Court noted that the second instalment was allegedly paid on January 27, 2020, while the first complaint to the Superintendent of Police was made only on March 13, 2023. It observed that by then, the limitation period for filing a recovery suit for the money had expired.

"Time and again this court has noticed that criminal proceedings are not a measure of recovery of money and civil disputes cannot be converted into criminal prosecution as an arm-twisting method to coerce the accused arrayed to satisfy the demand of money raised," the Bench said.

What happened before the Supreme Court?

According to the case record, the alleged transaction took place in 2019-20. In 2023, the complainant approached the Superintendent of Police alleging that he had been duped in connection with the proposed sale of the flat and had also been assaulted. When no action followed, he filed a complaint before the Chief Judicial Magistrate, Unnao.

During an inquiry, the police found that there was no flat at the location allegedly pointed out by Shukla. The police also produced call data records showing that Shukla was in Lucknow on March 6, 2023, the date on which the alleged assault was said to have taken place.

There was also a proceeding under the Negotiable Instruments Act, 1881 concerning the same Rs 10 lakh transaction against the wife of a land broker.

The Chief Judicial Magistrate dismissed the complaint, holding that the dispute was civil in nature.

A criminal revision was thereafter filed, following which the matter was remanded. The Additional Chief Judicial Magistrate, Unnao, again considered the matter and dismissed the complaint.

The order was subsequently affirmed by the Additional District and Sessions Judge, Unnao. The revisional court found that the police inquiry report, supported by documentary evidence, was contrary to the oral testimony relied upon by the complainant.

The complainant then approached the Allahabad High Court under Section 482 of the Code of Criminal Procedure (corresponding to Section 528 of the BNSS).

The high court set aside the order refusing cognizance and remanded the matter, but Shukla was not heard before the order was passed.

The Supreme Court then set aside the high court's order, finding "absolutely no reason to sustain it", restored the order refusing cognizance and dismissed the complaint.

Case Title: Sandeep Shukla Vs State of U.P. & Anr

Bench: Justices J B Pardiwala and K Vinod Chandran

Date of Judgment: August 05, 2026

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