In RYK Mills, show cause notices were issued for alleged tax violations but did not clearly specify charges. The Respondent company challenged those on grounds of violation of fair trial and due process. The matter reached the Supreme Court of Pakistan, which examined the nature and purpose of show cause notices.
Held: Show cause notices serve as pre-adjudication ADR tools, providing an opportunity to resolve disputes before escalating into litigation.
Court’s Observations:
“Issuance of a show cause notice also acts as a tool to resolve the issue in the prelitigation stage, similar to the objective of ADR.”
“By doing so, the matter can potentially be resolved before adjudication, saving time and resources, and encouraging efficient resolution outside the traditional legal framework.”
“Such practice prevents wastage of time and effort, curbs unnecessary litigation, and allows many cases to be resolved at the initial stage without burdening the public exchequer.”