A common legal position is that courts do not interfere at the stage of a Show Cause Notice (SCN). However, recently in the matter of J. Sri Nisha v. Special Director, Adjudicating authority, Directorate of Enforcement decision reiterates an important nuance: this rule is not absolute.
The Supreme Court clarified that while writ petitions against SCNs are generally not entertained, exceptional circumstances justify judicial intervention under Article 226.
When can courts intervene?
Interference is possible where the SCN:
- Lacks jurisdiction on the face of it;
- Reflects non-application of mind;
- Is issued with a pre-determined or biased approach;
- Constitutes an abuse of process of law;
- Violates principles of natural justice.
In such cases, the High Court is empowered to step in to prevent manifest injustice.
Judicial Consistency
This position aligns with the principles laid down in Union of India v. VICCO Laboratories, where the Court held:
Interference at the SCN stage should be rare—but is justified where the notice is without jurisdiction or amounts to abuse of process.