Disqualification Can’t Be Based on Hypothetical Tax Liabilities or Discrepancies in Property Records: Madhya Pradesh High Court Restores Councillor’s Election

“Trial Court erred by relying on conjectures and assuming future tax dues without statutory determination”, High Court of Madhya Pradesh at Indore set aside a District Court judgment that had invalidated the election of a councillor based on alleged discrepancies in her nomination affidavit, ruling that such assumptions without statutory backing or material effect on election results cannot be the ground for disqualification.

“Mere Discrepancies Between Affidavit and Municipal Records Do Not Amount to Disqualification or Corrupt Practice”

The core legal issue before the Court was whether the trial court was justified in setting aside the election of the returned candidate on the ground of alleged false disclosure of immovable property details and municipal dues in the affidavit submitted under Rule 24-A of the Madhya Pradesh Municipal Corporation Election Rules, 1994.

Justice Awasthi observed that, “The Trial Court has committed a grave jurisdictional error by acting on conjectures and surmises, without any statutory basis or concrete evidence showing that the discrepancies in municipal tax records were material to the outcome of the election.”

The case arose out of the July 2022 municipal elections in Indore, where petitioner Nisha Devliya, backed by the BJP, had secured 6,988 votes, defeating her closest rival, respondent Nandini Mishra of the Congress, who secured 5,962 votes. The latter filed an election petition under Section 441 of the Madhya Pradesh Municipal Corporation Act, 1956, alleging that Devliya had concealed critical property-related information and evaded municipal tax, constituting corrupt practice under Section 441-H of the Act.

Allegations of Incomplete Disclosure and Tax Evasion

The election petitioner had alleged that Devliya underreported the constructed area of multiple properties in her affidavit, resulting in lower property tax obligations. It was further contended that electricity connections and garbage fees were also wrongly classified as residential instead of commercial. The trial court accepted these allegations and declared the election void, also declaring Nandini Mishra, the runner-up, as the elected councillor under Section 441-D(2).

However, the High Court noted that the entire foundation of the election petition was speculative and lacked statutory grounding.

“There exists no provision in Rule 24-A or elsewhere requiring a candidate to match the disclosed area or property use in the affidavit with municipal records. The obligation is to declare movable and immovable properties to the best of the candidate’s knowledge and belief, not as per municipal tax assessments,” the Court held.

“Corrupt Practice Requires Proof Beyond Reasonable Doubt, Not Hypotheticals”

On the issue of corrupt practice, the High Court reiterated the settled law that such allegations are quasi-criminal in nature and must be proved beyond reasonable doubt.

“The allegations of corrupt practice based on future hypothetical tax accruals, or assumptions about past tax evasion, are not only speculative but legally unsustainable. There is no finding by a competent authority that the petitioner evaded taxes. The standard of proof required has not been met,” the judgment noted.

The Court referred to multiple decisions of the Supreme Court, including Ajmera Shyam v. Kova Laxmi (2025 SCC OnLine SC 1723) and Karikho Kri v. Nuney Tayang (2024 SCC OnLine SC 519), and clarified that not every omission or discrepancy in the affidavit constitutes a substantial defect warranting disqualification.

“The Court must distinguish between non-disclosure of substantial information affecting candidature, and insubstantial or clerical defects which have no material bearing,” the Court added.

“No Disqualification Under Section 17(1)(i) as No Dues Were Outstanding”

Another key contention was that the petitioner stood disqualified under Section 17(1)(i) of the 1956 Act due to unpaid taxes. The Court rejected this, stating:

“Disqualification under Section 17(1)(i) requires tax dues to be standing against the candidate for more than one year. Admittedly, no such arrears existed at the time of nomination. No Dues Certificates were issued by the Municipal Corporation in favour of the petitioner.”

It was further held that the election court cannot assume the jurisdiction of the municipal tax authority. Any determination of tax liability must follow the statutory process under Sections 148, 149, and 173 of the Act, which includes investigation, notice, and opportunity of hearing.

“The Trial Court acted without jurisdiction by assuming the role of the tax assessing authority and holding the petitioner liable for notional tax dues,” Justice Awasthi observed.

“Runner-Up Cannot Be Declared Elected Without Proof of Majority But For Returned Candidate’s Votes”

One of the most significant errors of the Trial Court, according to the High Court, was declaring the runner-up candidate elected without recording the mandatory finding under Section 441-D(2)(b)—that but for the votes obtained by the disqualified candidate, the petitioner (runner-up) would have received a majority of valid votes.

“The law is settled that a runner-up cannot be declared elected merely because the returned candidate’s election is set aside. There must be clear and cogent proof that the petitioner would have won. No such finding was recorded,” the Court noted while relying on Prakash Khandre v. Dr. Vijay Kumar Khandre (AIR 2002 SC 2345) and Manohar Nathurao Samarth v. Marotrao (AIR 1979 SC 1084).

The Court emphasized the need to respect the voter’s mandate and maintain the sanctity of elections:

“The election of a returned candidate, reflecting the will of thousands of voters, cannot be lightly interfered with on the basis of hypothetical assumptions, minor clerical errors, or speculative allegations of tax evasion.”

Findings of Trial Court Set Aside, Election Restored

In conclusion, the High Court allowed the civil revisions, holding that the Trial Court misdirected itself in law and usurped jurisdiction not vested in it.

“The findings rendered by the learned Trial Court declaring the nomination paper of the petitioner as null & void and declaring the election as void cannot withstand judicial scrutiny. The declaration of the runner-up as elected is also not sustainable in law,” Justice Awasthi ruled.

Accordingly, the election of Smt. Nisha Devliya was restored, and the impugned order dated 02.03.2024 was quashed.

Date of Decision: 19 December 2025