Cognizance — No Pre-Cognizance Summons under Section 223 BNSS. (Para 36(E)) Magistrate need not issue summons under Section 223 BNSS before taking cognizance; NI Act is special statute governed by Section 142. Ratio Decidendi: Pre-cognizance notice to accused is not mandatory in Section 138 complaints. Methods of Service of Summons — Mandatory Multi-Modal Mechanism. (Paras 36(A), 36(B), 36(I)) Service shall not be confined to ordinary modes. It must include: Dasti service by complainant in addition to court process. Electronic service under BNSS rules (email, mobile, messaging platforms). Affidavit verifying accused’s contact particulars at filing stage. Affidavit of service to be filed; false affidavit invites legal consequences. Post-service matters to be listed before physical courts to promote settlement. Ratio Decidendi: Multi-modal, technology-enabled and complainant-assisted service of summons is mandatory to prevent procedural delay in Section 138 cases.

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Negotiable Instruments Act, 1881 — Chapter XVII — Object and Interpretation. (Paras 11–14)

The criminalisation of cheque dishonour was introduced to restore credibility of cheques as substitutes for cash and ensure financial discipline. Interpretation must advance this legislative intent and not dilute statutory presumptions.

Ratio Decidendi: Courts must construe Sections 138–148 NI Act in a manner that reinforces cheque credibility and avoids converting proceedings into ordinary civil recovery suits.

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Sections 118 & 139 NI Act — Presumptions — Trigger and Burden of Rebuttal. (Paras 15–18)

Upon admission of signature/execution, presumptions of consideration and legally enforceable debt arise. Observations in Krishna Janardhan Bhat stand overruled by Rangappa v. Sri Mohan.

Ratio Decidendi: Admission of signature mandates drawing of statutory presumptions; accused bears initial burden to rebut by credible, probable defence.

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Rebuttal — Financial Capacity — Evidentiary Standard. (Paras 22–24, 29)

Complainant need not initially prove financial capacity unless specifically challenged with material foundation. Non-reply to statutory notice strengthens complainant’s case.

Reliance on Tedhi Singh v. Narayan Dass Mahant and MMTC Ltd. v. Medchl Chemicals & Pharma (P) Ltd..

Ratio Decidendi: Burden shifts back to complainant only after accused discharges initial evidentiary onus.

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Section 269SS Income Tax Act — Effect on Legally Enforceable Debt. (Paras 19–20)

Violation of Section 269SS attracts fiscal penalty under Section 271D but does not render the transaction void or unenforceable. Kerala High Court view set aside.

Ratio Decidendi: Breach of fiscal restriction on cash transactions does not negate enforceability under Section 138 NI Act nor rebut statutory presumption.

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Revisional Jurisdiction — Limits of Interference. (Paras 27–28)

High Court cannot re-appreciate evidence and upset concurrent findings absent perversity.

Ratio Decidendi: Revisional jurisdiction is supervisory, not appellate; interference requires jurisdictional error or manifest perversity.

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Blank Signed Cheque Defence. (Para 32)

Plea that cheque was issued blank for facilitating bank loan was rejected as implausible.

Ratio Decidendi: Bare plea of “security cheque” or “blank cheque” without supporting evidence does not rebut presumption under Sections 118 and 139.

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Nature of Proceedings — Quasi-Criminal — Compensatory Character. (Paras 33–35)

Reiterating P. Mohanraj v. Shah Brothers Ispat Pvt. Ltd., proceedings are compensatory in substance; object is securing payment, not retribution.

Ratio Decidendi: Section 138 is a “civil sheep in criminal wolf’s clothing”; primary focus is monetary restitution.

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Probation of Offenders Act — Applicability. (Para 35)

Benefit of Probation of Offenders Act, 1958 may be extended in appropriate Section 138 cases; contrary view disapproved.

Ratio Decidendi: Conviction under Section 138 does not automatically exclude reformative sentencing options.

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PROCEDURAL AND SYSTEMIC REFORMS

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Cognizance — No Pre-Cognizance Summons under Section 223 BNSS. (Para 36(E))

Magistrate need not issue summons under Section 223 BNSS before taking cognizance; NI Act is special statute governed by Section 142.

Ratio Decidendi: Pre-cognizance notice to accused is not mandatory in Section 138 complaints.

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Methods of Service of Summons — Mandatory Multi-Modal Mechanism. (Paras 36(A), 36(B), 36(I))

Service shall not be confined to ordinary modes. It must include:

Dasti service by complainant in addition to court process.
Electronic service under BNSS rules (email, mobile, messaging platforms).
Affidavit verifying accused’s contact particulars at filing stage.
Affidavit of service to be filed; false affidavit invites legal consequences.
Post-service matters to be listed before physical courts to promote settlement.

Ratio Decidendi: Multi-modal, technology-enabled and complainant-assisted service of summons is mandatory to prevent procedural delay in Section 138 cases.

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Summary Trial — Admission Questions at Initial Stage. (Para 36(F))

Trial Courts may put structured admission questions under Section 251 CrPC / Section 274 BNSS regarding cheque, signature, liability and defence.

Ratio Decidendi: Early crystallisation of defence is essential to preserve summary nature of trial; conversion to summons trial requires recorded reasons.

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Interim Compensation — Section 143A NI Act. (Para 36(H))

Trial Courts shall exercise power to order interim compensation at earliest appropriate stage.

Ratio Decidendi: Early interim compensation furthers compensatory objective and discourages dilatory defence.

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Online Payment Mechanism — QR/UPI Settlement Framework. (Para 36(C))

District Courts to operationalise secure digital payment systems for direct payment of cheque amount at threshold stage.

Ratio Decidendi: Institutional facilitation of immediate payment promotes compounding and reduces pendency.

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Monitoring and Dashboard Mechanism — Metropolitan Courts. (Para 36(K)–(L))

District Judges in Delhi, Mumbai, Calcutta to maintain dashboards tracking pendency, disposal, adjournments and settlement rates; High Courts to constitute monitoring committees.

Ratio Decidendi: Administrative oversight and data-driven monitoring are necessary to address systemic backlog in NI Act litigation.

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Revised Compounding Scheme — Modification of Damodar S. Prabhu v. Sayed Babalal H.. (Paras 37–38)

Before defence evidence — no cost.
After defence evidence, before judgment — 5%.
Before Sessions/High Court — 7.5%.
Before Supreme Court — 10%.

Ratio Decidendi: Reduced graded cost structure incentivises early compounding while preserving judicial efficiency.

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Instalment-Based Compliance — Appellate Power. (Para 40)

Supreme Court restored conviction and directed payment of Rs.7,50,000/- in 15 EMIs.

Ratio Decidendi: Appellate courts may structure instalment-based restitution orders to achieve substantive compensatory justice.

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Final Order

High Court acquittal set aside.
Concurrent conviction restored.
Payment directed in 15 monthly instalments.
Guidelines to be implemented nationwide by 01.11.2025.

Order XVIII Rule 17 CPC — Recall of Witness — Scope and Limitations. (Paras 2–4, 11) Petitioner challenged the order allowing recall of PW.1 for cross-examination. It was contended that Order XVIII Rule 17 CPC cannot be invoked to fill up lacunae in cross-examination and that the application was belated. The Court acknowledged settled law that Order XVIII Rule 17 CPC is not intended to fill lacunae. However, it found that defendant Nos.1 and 2 had not cross-examined PW.1 at all. Ratio Decidendi: While Order XVIII Rule 17 CPC cannot be invoked to fill omissions in evidence, where a necessary party has not cross-examined the principal witness at all, recall may be permitted to ensure effective adjudication of the lis.

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Order XVIII Rule 17 CPC — Recall of Witness — Scope and Limitations. (Paras 2–4, 11)

Petitioner challenged the order allowing recall of PW.1 for cross-examination. It was contended that Order XVIII Rule 17 CPC cannot be invoked to fill up lacunae in cross-examination and that the application was belated.

The Court acknowledged settled law that Order XVIII Rule 17 CPC is not intended to fill lacunae. However, it found that defendant Nos.1 and 2 had not cross-examined PW.1 at all.

Ratio Decidendi: While Order XVIII Rule 17 CPC cannot be invoked to fill omissions in evidence, where a necessary party has not cross-examined the principal witness at all, recall may be permitted to ensure effective adjudication of the lis.

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Partition Suit — Necessity of Effective Cross-Examination by Contesting Defendants. (Paras 8–11, 13)

The underlying suit (O.S. No.40 of 2013) is one for partition. Defendant Nos.1 and 2 are central parties against whom substantive relief is claimed. Subsequent purchasers (defendant Nos.3 to 5) have limited role.

The absence of cross-examination by defendant Nos.1 and 2 would impair effective adjudication on merits.

Ratio Decidendi: In partition suits, where principal defendants have not cross-examined the plaintiff, denial of opportunity to cross-examine may prejudice adjudication on merits; procedural rigidity must yield to substantive justice.

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Application of Supreme Court Precedents — Contextual Distinction. (Paras 4, 12)

Reliance was placed on
Vadiraj Nagappa Vernekar v. Sharadchandra Prabhakar Gogate and
Bagai Construction v. Gupta Building Material Store

These authorities hold that recall cannot be used to fill lacunae and that post-amendment CPC mandates continuous trial.

The Court distinguished these precedents, holding them inapplicable to present facts where cross-examination by necessary defendants had not occurred at all.

Ratio Decidendi: Supreme Court decisions restricting recall under Order XVIII Rule 17 CPC do not bar recall where essential cross-examination by necessary parties has not been conducted and recall is required for complete adjudication.

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Supervisory Jurisdiction under Article 227 — Limited Interference. (Paras 7, 14)

The revision was filed under Article 227 of the Constitution. The Court found no perversity or jurisdictional error in the trial Court’s discretion in allowing recall.

Ratio Decidendi: In supervisory jurisdiction under Article 227, interference is unwarranted where trial Court exercises discretion to permit recall for effective adjudication and no patent illegality or perversity is demonstrated.

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Expeditious Disposal — Time-bound Direction. (Para 13)

Considering pendency since 2013, the trial Court was directed to dispose of the suit within eight months.

Ratio Decidendi: Where recall is permitted in an old suit, expeditious disposal directions are necessary to balance procedural fairness with avoidance of delay.

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Final Order

Civil Revision Petition dismissed.
Order dated 12.12.2022 in I.A. No.404 of 2022 in O.S. No.40 of 2013 upheld.
Trial Court directed to dispose of suit within eight months.
No order as to costs.
Pending miscellaneous petitions closed.

Quashing of FIR — Inherent Powers under Section 482 Cr.P.C. / Section 528 BNSS — Compromise between Parties. (Paras 1–3, 5) Petitioners/A1 to A7 sought quashing of FIR No.75 of 2025 registered for offences under Sections 115(2), 118(1), 352(2) r/w 3(5) of the Bharatiya Nyaya Sanhita, 2023 and Sections 3(2)(va), 3(1)(r), 3(1)(s) of the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989. The de facto complainant appeared before Court, was identified, and categorically stated that compromise was voluntary and without coercion. Court recorded satisfaction regarding voluntariness and identity. Ratio Decidendi: The High Court, in exercise of inherent jurisdiction under Section 482 Cr.P.C. (corresponding to Section 528 BNSS), may quash criminal proceedings where parties have voluntarily settled the dispute and continuation of proceedings would serve no useful purpose.

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Quashing of FIR — Inherent Powers under Section 482 Cr.P.C. / Section 528 BNSS — Compromise between Parties. (Paras 1–3, 5)

Petitioners/A1 to A7 sought quashing of FIR No.75 of 2025 registered for offences under Sections 115(2), 118(1), 352(2) r/w 3(5) of the Bharatiya Nyaya Sanhita, 2023 and Sections 3(2)(va), 3(1)(r), 3(1)(s) of the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989.

The de facto complainant appeared before Court, was identified, and categorically stated that compromise was voluntary and without coercion. Court recorded satisfaction regarding voluntariness and identity.

Ratio Decidendi: The High Court, in exercise of inherent jurisdiction under Section 482 Cr.P.C. (corresponding to Section 528 BNSS), may quash criminal proceedings where parties have voluntarily settled the dispute and continuation of proceedings would serve no useful purpose.

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Scope of Inherent Power Distinguished from Compounding under Section 320 Cr.P.C. — Application of Gian Singh Principle. (Para 4)

The Court relied upon the principles laid down by the Supreme Court in Gian Singh v. State of Punjab, particularly paragraph 57, holding that inherent powers are distinct from statutory compounding and may be exercised to secure ends of justice or prevent abuse of process.

The Court emphasized that quashing on compromise depends on nature and gravity of offence. Heinous offences and those having serious societal impact cannot ordinarily be quashed merely on compromise.

Ratio Decidendi: Inherent jurisdiction to quash is guided by twin objectives — securing ends of justice and preventing abuse of process — and must consider nature and gravity of the offence before exercising discretion.

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Effect of Compromise — Remote Possibility of Conviction — Abuse of Process. (Paras 3, 5)

Upon recording compromise and considering the factual matrix, the Court concluded that chances of conviction were remote and bleak, and continuation of proceedings would amount to oppression and prejudice.

Ratio Decidendi: Where compromise renders possibility of conviction remote and continuation of prosecution would amount to abuse of process, High Court is justified in terminating criminal proceedings.

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Offences under Special Statutes — Exercise of Discretion. (Para 4, contextual application)

Although offences included provisions under the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989, the Court, after satisfaction regarding compromise and factual context, exercised discretion to quash proceedings.

Ratio Decidendi: Even where offences are under special statutes, the High Court retains inherent jurisdiction; however, exercise of such power must be based on careful scrutiny of facts and voluntariness of settlement.

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Final Order

Criminal Petition No.1502 of 2026 allowed.
Proceedings in FIR No.75 of 2025 of Voyalapadu Police Station, Annamayya District quashed.
I.A. Nos.2 and 3 of 2026 allowed.
Pending interlocutory applications closed.