Writ Jurisdiction Cannot Be Invoked to Challenge a Show-Cause Notice When Statutory Remedies Exist

The petitioners are the Chairman, Vice-Chairman, and Committee Members of the Sonsak Group Cooperative Cotton Sale Society Limited. Following an audit (2023-24) and subsequent inspection under Section 87 of the Gujarat Cooperative Societies Act, 1961, irregularities were discovered involving the misappropriation of approximately ₹58.40 lakhs.

Allegations included fraudulent loan entries for 65 agriculturists who had never applied for such funds.

While the Society initiated criminal proceedings against an ex-manager, the District Registrar (Respondent No. 2) issued a show-cause notice dated April 16, 2025, under Section 93 of the Act to the petitioners, seeking to assess damages for the alleged financial loss.

The petitioners challenged this notice via a writ petition, claiming they were not personally liable and that the audit had initially cleared them of wrongdoing.

1. Whether a writ petition under Article 226 of the Constitution is maintainable against a mere show-cause notice issued under Section 93 of the Gujarat Cooperative Societies Act, 1961.

2. Whether the court should exercise its extraordinary jurisdiction when a statutory alternative remedy is available and the proceedings are at a pre-mature stage.

The court applied Section 93 of the Gujarat Cooperative Societies Act, 1961, which empowers the Registrar to assess damages against delinquent office-bearers if they have misapplied funds or are guilty of misfeasance.

The court relied on the established principle that writ jurisdiction should not typically be exercised against a show-cause notice unless it is issued without jurisdiction or in patent violation of law.

Precedents cited for this restraint include Registrar, Co-Operative Societies v. Vipulbhai M. Chaudhary (2019), Bharatbhai Maganbhai Patel v. Director (Sugar) (2025), and Kheda District Cooperative Purchase and Sales Union Ltd. v. J.P. Gupta.

The court reasoned that a show-cause notice is merely an invitation for the concerned parties to explain alleged discrepancies and does not constitute a final adverse order.

Since the petitioners have the opportunity to refute allegations and produce evidence before the Registrar, the petition was deemed pre-mature.

The court noted that Section 93(1) has a broad scope, covering any person involved in the management within five years of the audit.

The court found no merit in the claim of arbitrary action, observing that several other committee members had already opted for the statutory alternative remedy by filing appeals before the Additional Registrar (Appeals).

Following the Division Bench's stance in Vipulbhai M. Chaudhary, the court held that judicial interference at the notice stage is unwarranted when the authority is acting within its legal mandate.

The court dismissed the petition, holding that the challenge to the show-cause notice was pre-mature and that the petitioners must utilize the statutory process under the Act.

All interim reliefs were vacated, and the request for an extension of the stay was refused.