- 1 - HC-KAR NC: 2026:KHC:5244 WP No. 478 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF JANUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE ASHOK S.KINAGI WRIT PETITION NO. 478 OF 2026 (CS-RES) BETWEEN: 1. SRI SURESH KULAL AGED 48 YEARS S/O PADMANABHA MUGDALGUDDE HOUSE, BANTWAL KASABA BANTWAL TALUK, DAKSHINA KANNADA 574211 2. SRI. JANARDHANA BONDALA AGED ABOUT 50 YEARS S/O CHENAPPA MOOLYA, BONDALA HOUSE, PANE MANGALORE, SHAMVHOOR POST, DAKSHINA KANNADA-574211 …PETITIONERS (BY SRI. VINOD KUMAR M., ADVOCATE) AND: 1. THE STATE OF KARNATAKA REPRESENTED BY ITS PRINCIPAL SECRETARY, DEPARTMENT OF CO-OPERATION, GOVERNMENT OF KARNATAKA, 6TH FLOOR, M.S. BUILDING, BENGALURU 560001 Digitally signed by SUNITHA K S Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:5244 WP No. 478 of 2026 2. THE REGISTRAR OF CO-OPERATIVE SOCIETIES ALI ASKAR ROAD, BANGALORE 560001 3. DIRECTOR, CO-OPERATIVE AUDIT DEPARTMENT NO. 17, JAYANIVAS, SHANKARMUTT ROAD, BASAVANAGUDI, BANGALORE- 560 004 4. SAMAJA SEVA SAHAKARA SANGHA REGISTERED UNDER CO OPERATIVE SOCIETIES ACT 1959, BYPASS JUNCTION ROAD, AMTADY, BANTWAL, 574211 REPRESENTED BY ITS CEO 5. DEPUTY DIRECTOR CO-OPERATIVE AUDIT DEPARTMENT SHIVAMOGGA SHIVAMOGGA DISTRICT – 577 201. …RESPONDENTS (BY SRI. YOGESH D NAIK, AGA FOR R1 TO R3 & R5) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING, THE AUDIT ORDER/NOTICE DATED 01/08/2025 ISSUED BY RESPONDENT NO.3, PRODUCED AT ANNEXURE-J AND THE SUBSEQUENT NOTICE/ORDER DATED 15/12/2025 ISSUED BY RESPONDENT NO.3 PRODUCED AT ANNEXURE-M. AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - HC-KAR NC: 2026:KHC:5244 WP No. 478 of 2026 CORAM: HON'BLE MR. JUSTICE ASHOK S.KINAGI ORAL ORDER 1. The petitioners filed this petition seeking the following reliefs: a) Issue a writ of certiorari or any other appropriate writ, order or direction quashing, the audit order/notice 01/08/2025 issued by Respondent No.3, produced at Annexure-J(Order No. ತಪಘ/ ೖ/ಧ/ ಕನಡ/ಸ.ೇ/11/2024-25) and the subsequent notice/order dated 15/12/2025 issued by Respondent No.3 produced at Annexure-M(ಸಂ.ಉ.ಸೇಸಸಂ ಮರು ಪ:2025-26). b) Declare that, having regard to Section 70 of the Karnataka Co-operative Societies Act, 1959 and the pendency of proceedings in RCS Appeal No. RCS/DAP/D1/22/2025 26 (Annexure-H), and Crl.P.No.14301/2024 (Annexure-E), the Respondent authorities are not entitled to proceed with any coercive steps or recovery against the Petitioners in respect of the transactions forming the subject matter of Crime No.134/2024(Annexure-C), and the audit objections referred to in Annexures-J and M; c) Declare that any enquiry into the alleged irregularities in the relevant gold loan transactions shall abide by and be subject to the outcome of RCS Appeal No. RCS/DAP/D1/22/2025 26(Annexure-H); Crl.P.No.14301/2024(Annexure-E) pending and before this Hon'ble Court; - 4 - HC-KAR NC: 2026:KHC:5244 WP No. 478 of 2026 d) Grant such other and further orders as this Hon'ble Court deems fit in the facts and circumstances of the case, in the interests of justice and equity. 2. Brief facts, leading rise to the filing of this petition are as follows: 3. The petitioners represents the duly elected Board of Directors of Samaja Seva Sahakara Sangha, Bantwal with petitioner No.1 as President elected on 21.02.2025 for a 5 year term. One Lokanath D (member) filed complaints alleging irregularities in AGM, bylaws amendments, gold loan sanctions etc., and a criminal case was registered against the petitioners in Crime No. 134 of 2024 and initiated proceedings for disqualification and order came to be passed on 18.11.2025. The petitioner aggrieved by the order of disqualification preferred the appeal. 4. The appellate authority has stayed the order of disqualification. The petitioners also challenged the registration of criminal case against the petitioners in - 5 - HC-KAR NC: 2026:KHC:5244 WP No. 478 of 2026 Criminal petition No. 14301 of 2024. Meanwhile, the respondents have issued a notice dated 15.12.2025 vide Annexure-M, calling upon the petitioners to submit an explanation. The petitioners instead of submitting an explanation to Annexure-M, filed this writ petition. 5. Heard the arguments of the learned counsel for the petitioners, and learned Additional Government Advocate for the respondents No.1 to 3 and 5. 6. Learned counsel for the petitioners submits that the appellate authority has stayed the order of disqualification, and the Hon’ble Court has stayed further proceedings in Criminal Petition No. 14301 of 2024. Respondent No.3 could not have issued a notice. Hence, he submits that the action of respondent No.3 in issuing a notice is arbitrary and erroneous. Hence, on these grounds, he prays to allow the writ petition. - 6 - HC-KAR NC: 2026:KHC:5244 WP No. 478 of 2026 7. Per contra, learned Additional Government Advocate submits that Annexure-M is only a notice. The petitioners, instead of submitting a reply to the show cause notice, filed this writ petition. He submits that the writ petition challenging the show cause notice is not maintainable and to buttress his argument, he has placed a judgment of the Hon'ble Apex Court in the case of Commissioner of Central Excise, Haldia vs. M/s. Krishna Wax Private Limited in Civil Appeal No.8609/2019 disposed of on 14.11.2019. He submits that the petitioners may be directed to reply to the show cause notice and respondent No.3 would consider the reply, and pass the appropriate order in accordance with law. Accordingly, prays to dispose of the petition. 8. Perused the records, and considered the submissions of the learned counsel for the parties. 9. It is an undisputed fact that the petitioners aggrieved by the show cause notice vide Annexure-M, filed this - 7 - HC-KAR NC: 2026:KHC:5244 WP No. 478 of 2026 writ petition. Respondent No.3 called upon the petitioners to submit an explanation to the show cause notice within 7 days. The said notice was issued on 15.12.2025. The petitioners instead of giving a reply to the show cause notice, filed this writ petition. In view of the proposition laid down by the Hon'ble Apex Court in the case of Commissioner of Central Excise, Haldia vs. M/s. Krishna Wax Private Limited in Civil Appeal No.8609/2019, the writ petition is not maintainable, wherein, the Hon'ble Apex Court held in para 12, which reads as follows: “12. It has been laid down by this Court that the excise law is a complete code in itself and it would normally not be appropriate for a Writ Court to entertain a petition under Article 226 of the Constitution and that the concerned person must first raise all the objections before the authority who had issued a show cause notice and the redressal in terms of the existing provisions of the law could be taken resort to if an adverse order was passed - 8 - HC-KAR NC: 2026:KHC:5244 WP No. 478 of 2026 against such person. For example in Union of India and another vs. Guwahati Carbon Limited reported in (2012) 11 SCC 651 , it was concluded; “The Excise Law is a complete code in order to seek redress in excise matters and hence may not be appropriate for the writ court to entertain a petition under Article 226 of the Constitution”, while in Malladi Drugs and Pharma Ltd. vs. Union of India, it was observed:- “…The High Court, has, by the impugned judgment held that the Appellant should first raise all the objections before the Authority who have issued the show cause notice and in case any adverse order is passed against the Appellant, then liberty has been granted to approach the High Court… …in our view, the High Court was absolutely right in dismissing the writ petition against a mere show cause notice.” It is thus well settled that writ petition should normally not be entertained against mere issuance of show cause notice. In the present case no show cause notice was even issued when the High Court had initially entertained the petition and directed the Department to - 9 - HC-KAR NC: 2026:KHC:5244 WP No. 478 of 2026 prima facie consider whether there was material to proceed with the matter.” 10. In view of the exposition of law laid down by the Hon’ble Apex Court in the case of Commissioner of Central Excise, Haldia (referred supra), the writ petition challenging the show cause notice is not maintainable. Accordingly, I do not find any grounds to entertain the writ petition. 11. In view of the above discussion, I proceed to pass the following: ORDER i. The writ petition is disposed of reserving a liberty to the petitioners to reply to the show cause notice vide Annexure-M, within 25 days from today, and thereafter respondent No.3 is directed to consider the reply and pass the appropriate order in accordance with law. ii. All the contentions of the parties are kept open. - 10 - HC-KAR NC: 2026:KHC:5244 WP No. 478 of 2026 iii. Respondent No.3 is directed not to take any coercive steps till passing of an order. iv. Pending IA(s), if any, stands disposed of accordingly. Sd/- (ASHOK S.KINAGI) JUDGE SKS