Rs 40,000 loan hide: Orissa High Court saves Sarpanch from ouster

Justice R K Pattanaik allowed the plea filed by the disqualified sarpanch.

‘Not every non-disclosure invalidates nomination’

• A candidate must have to disclose his assets and liabilities including loans, while filing the nomination paper.
• It is the settled law that concealment or suppression of information, such as pending criminal cases or financial liabilities deprives voters of an informed choice and can be a ground for setting aside an election.
• It may even be a case of corrupt practice, if concealment or suppression of any such vital information has taken place. But it is equally a settled law that while not every non-disclosure automatically invalidates a nomination.
• A substantial non-disclosure, which is likely to affect the voter’s perception of the candidate’s integrity, can be considered a defect of a substantial character rendering the nomination invalid. Any such decision on disqualification is, therefore, subject to ‘substantial defect rule’ and not that each and every nondisclosure is to nullify a nomination.
• In other words, if the undisclosed bank loan is substantial, the omission is likely to be considered a substantial defect under the Act justifying the rejection of nomination or setting aside the election, as it violates the voter’s right to know about the candidate’s financial standing.
• It is pleaded that the petitioner was having loan with outstanding dues for an amount of Rs 40,554 against her.
• It is also alleged that the husband of the petitioner is a loanee in Service Cooperative Societies Ltd., the fact, which was concealed by her in the affidavit vis-a-vis government dues payable to the financial institutions shown as ‘nil’.
• Except the above, there is no pleading to the effect that the nondisclosure of the above information regarding the loan dues pending against the petitioner and her husband has in a way significantly affected the result of the election.

‘Materially affects results’

• As earlier discussed, each and every non-disclosure does not amount to substantial non-compliance thereby materially affecting the result of the election.
• If a large extent of assets or huge loan outstanding dues is not revealed by a candidate, it would amount to suppression of facts and for such nondisclosure, it would invite disqualification.
• Such breach in observance of the provisions of the Act by not disclosing the assets of high value or financial liabilities for a huge amount could lead to a conclusion that there has been concealment of facts and it amounts to undue influence even to qualify as a corrupt practice adopted by the returned candidate.
• Declaring an election as void must have to be on the basis of any such mistake, error, illegality or informality which has led to a situation that materially affected the result of the election.

Case

• The petitioner was elected Sarpanch of Kankadahad Gram Panchayat in 2022.
• Her election was challenged by a rival candidate on the ground that she had failed to disclose outstanding loan liabilities in her nomination affidavit, allegedly attracting disqualification under Section 25(1)(w) of the Odisha Grama Panchayats Act, 1964.
• Both the trial court and the appellate court had upheld the disqualification, prompting the petitioner to approach the High Court.