The Karnataka High Court has firmly held that repeated attempts to reopen a final conviction under Section 138 of the Negotiable Instruments Act, after dismissal of Special Leave Petitions and review petitions at the Supreme Court, constitute an abuse of process of law. The Court dismissed a petition under Section 482 CrPC seeking to quash the conviction, emphasizing that judicial finality cannot be circumvented through procedural ingenuity.
Background & Facts
The Dispute
The dispute arose from a commercial arrangement between R. Vijayendra Babu, the petitioner, and M/s Spectra Lamps Pvt. Ltd., where the petitioner and his wife were directors. The 3rd respondent, C. Hemanth Kumar, advanced ₹1.21 crore to clear the company’s dues to the Karnataka State Financial Corporation. As security, Hemanth Kumar retained title documents and blank signed forms. A dispute ensued, leading Hemanth Kumar to file a private complaint under Section 200 CrPC, resulting in Criminal Case No. 31986/2009 against the petitioner and the company for offences under Section 138 of the Negotiable Instruments Act, 1988.
Key Facts
- The petitioner and his wife were directors of M/s Spectra Lamps Pvt. Ltd. since its incorporation on 02.01.1995.
- A Memorandum of Understanding (Ex.D.4) dated 14.02.2008 purportedly recorded their resignation as directors and transfer of management to Hemanth Kumar.
- Form 32 for change in directors was never filed with the Registrar of Companies.
- On 05.02.2009, the petitioner executed Ex.P.22, a letter acknowledging outstanding liability of ₹1.905 crore and confirming his role as Managing Director, nullifying prior agreements.
- Three post-dated cheques (Ex.P.1 to P.3) issued by the petitioner in his personal and official capacity were dishonoured for insufficient funds.
- A demand notice was issued on 15.03.2009, and the cheques were dishonoured on 20.03.2009.
- The petitioner’s resignation in 2008 was never formally documented or registered.
- The company was struck off the Register of Companies on 12.10.2017 under Section 248(5) of the Companies Act, 2013.
- Records relating to the case were destroyed in accordance with Rule 4(c)(iv) of the Disposal of Records Rules, 2003, after five years from disposal of the case.
Procedural History
- 04.02.2015: 22nd ACMM, Bengaluru acquitted the petitioner and the company in C.C. No. 31986/2009.
- 14.10.2022: Karnataka High Court, in Criminal Appeal No. 422/2015, set aside the acquittal and convicted the petitioner under Section 138 NI Act and Section 141.
- Conviction against the company: Fine of ₹2 crore; ₹1.9975 crore compensation to complainant; ₹25,000 prosecution expenses.
- Conviction against petitioner personally: Fine of ₹75,000; ₹70,000 compensation; ₹5,000 prosecution expenses.
- 02.12.2022: Supreme Court dismissed S.L.P.(Crl.) No. 11205/2022 without reasons.
- 23.06.2023: Karnataka High Court dismissed I.A. No. 1/2023 under Section 362 CrPC seeking correction of clerical errors.
- 19.01.2026: Karnataka High Court dismissed W.P.(Crl.) No. 14332/2024 seeking quashing of conviction under Section 482 CrPC.
- 13.05.2024: Review petition (Diary No. 22912/2024) filed in Supreme Court.
- 27.05.2024: W.P.(Crl.) No. 14332/2024 filed.
- 02.06.2026: Supreme Court dismissed review petition on grounds of delay and merits.
- 23.02.2026: Execution Court passed order on enforcement of conviction.
- 27.03.2026: Present petition (Crl.P. No. 3663/2026) filed before Karnataka High Court.
- 12.06.2026: Judgment pronounced.
The Parties' Positions
For the Petitioner
- Claimed resignation as director in 2008 rendered him not liable for offences under Section 138 NI Act.
- Argued that the conviction order was void due to non-compliance with Section 305 CrPC (company not represented).
- Sought quashing of the 23.02.2026 execution order on grounds that the appellate order dated 14.10.2022 was a nullity.
- Relied on a post-conviction compromise agreement dated 25.11.2023, wherein he agreed to pay ₹1.90 crore, to argue for quashing.
- Claimed inability to access records due to destruction under Rule 4(c)(iv) of Disposal of Records Rules, 2003.
For the Respondent
- Contended that the petitioner’s resignation was never legally effective due to non-filing of Form 32.
- Highlighted that Ex.P.22 dated 05.02.2009 reaffirmed the petitioner’s role as Managing Director.
- Argued that the compromise agreement dated 25.11.2023 was never performed and was filed only after conviction.
- Stated that the petitioner had exhausted all remedies: acquittal reversed, SLP dismissed, review dismissed, and prior writ petition rejected.
- Asserted that the petition was a clear abuse of process, designed to evade a final conviction.
Relief Sought
The petitioner sought:
- Quashing of the order dated 23.02.2026 passed in C.C. No. 31986/2009.
- Declaration that the appellate order dated 14.10.2022 was non est, void, and non-enforceable.
- Alternatively, remittal to the Execution Court to adjudicate the plea of nullity.
- Costs and any further relief deemed fit.
The Legal Issue
The central question was whether a criminal petition under Section 482 CrPC can be entertained to quash a conviction under Section 138 NI Act after the conviction has been upheld by the High Court, the Supreme Court has dismissed the S.L.P., and a review petition has been rejected on merits and delay.
Arguments Presented
For the Appellant/Petitioner
The petitioner relied on the alleged non-filing of Form 32 and destruction of records to argue that his status as director was legally invalid, rendering the conviction void. He invoked the compromise agreement dated 25.11.2023, claiming it extinguished the liability. He cited Smt. Lakshmaibai v. State of Karnataka and Ramgopal v. State of Madhya Pradesh to argue that post-conviction compromise can justify quashing under Section 482 CrPC. He further contended that the High Court’s conviction order was procedurally defective due to non-compliance with Section 305 CrPC.
For the Respondent/State
The respondents countered that the petitioner’s resignation was never effective under company law, as Form 32 was never filed. They emphasized that Ex.P.22 unequivocally reaffirmed his role as Managing Director. They argued that the compromise agreement was unenforced and filed only after conviction to manipulate the process. They cited the Supreme Court’s dismissal of the S.L.P. and review petition as conclusive evidence of finality. They contended that the petition was a classic abuse of process, designed to circumvent a final conviction.
The Court's Analysis
The Court conducted a rigorous analysis of the petitioner’s conduct across multiple forums. It noted that the petitioner had already challenged the conviction before the High Court in appeal, before the Supreme Court in S.L.P., and again in a review petition - all of which were dismissed. The Court observed that the petitioner’s current petition was not a genuine attempt to seek justice but a tactical maneuver to evade the consequences of a final conviction.
"The petitioner is wanting to dilute the order of conviction passed by the co-ordinate Bench against which the S.L.P. is dismissed by putting the clock back or walking back to the date of submission of resignation in the year 2008."
The Court rejected the petitioner’s reliance on Ramgopal and Lakshmaibai, distinguishing those cases on the ground that the compromise in those matters was acted upon and filed before final adjudication. Here, the compromise was filed after conviction, remained unperformed, and was never disclosed during earlier proceedings.
The Court also dismissed the petitioner’s claim regarding destruction of records, noting that Rule 4(c)(iv) of the Disposal of Records Rules, 2003, permitted destruction of prosecution records five years after disposal of the case. The company was struck off in 2017, and the case was disposed of in 2022 - making record destruction lawful and irrelevant to the petitioner’s claim.
The Court emphasized that Section 482 CrPC cannot be used as a substitute for appeal or review. It held that the petitioner’s repeated petitions constituted a clear abuse of process, and allowing such conduct would undermine the finality of judicial orders.
"If this would be permitted, it would, on the face of it, be permitting the abuse of the process of law by the petitioner, who has suffered conviction at the hands of the coordinate Bench."
The Court further noted that the petitioner had signed the compromise agreement as representative of the company, directly contradicting his claim that he was not a director. This inconsistency further eroded his credibility.
The Verdict
The petition was dismissed. The Court held that the conviction under Section 138 NI Act dated 14.10.2022 remains valid and enforceable. The petitioner is liable to pay the fine of ₹2 crore to the company and ₹75,000 personally, with compensation of ₹1.9975 crore and ₹70,000 respectively to the complainant. The execution proceedings initiated on 23.02.2026 are lawful and shall proceed. The Court declined to impose exemplary costs due to the pendency of I.A. No. 1/2026 in the original appeal but affirmed that the petition was an abuse of process.
What This Means For Similar Cases
Finality of Conviction Cannot Be Circumvented
- Practitioners must recognize that once a conviction is upheld by the High Court and the Supreme Court dismisses the S.L.P. and review petition, any subsequent petition under Section 482 CrPC seeking quashing on the same grounds will be dismissed as an abuse of process.
- Post-conviction compromise agreements, if unperformed and undisclosed during appellate proceedings, cannot be invoked to quash a final conviction.
Documentary Evidence Trumps Oral Claims
- In corporate liability cases under Section 138 NI Act, the legal status of a director is determined by statutory filings (e.g., Form 32), not unilateral assertions or unregistered agreements.
- Documents like Ex.P.22, which reaffirm authority, override prior resignation claims if not formally registered.
Records Destruction Is Not a Ground for Relief
- Destruction of records under statutory rules (e.g., Disposal of Records Rules, 2003) after the prescribed period does not invalidate convictions or create grounds for reopening cases.
- Petitioners cannot use destruction of records as a shield to challenge final orders when the evidence was already adjudicated.
