State PCS - Madhya Pradesh (MP PCS)

• 31 May 2025

MP High Court Upholds Withdrawal of Financial Powers of Sarpanch

Why in News? 

The Madhya Pradesh High Court recently upheld the decision of the Chief Executive Officer (CEO), District Panchayat, to withdraw the financial powers of Sarpanch of Gram Panchayat on charges of corruption.  

• The withdrawal followed the registration of a Lokayukta case against the sarpanch for demanding a bribe. 

Key Points 

• Arguments Regarding the Case: 
  • The sarpanch challenged the order, contending that the CEO acted beyond jurisdiction since no specific provision allows withdrawal of financial powers merely upon registration of a criminal case. 
• High Court Verdict: 
  • HC referred to the Madhya Pradesh Panchayat (Powers & Works of CEO) Rules, 1985. 
  • It observed that the CEO has supervisory and controlling powers over Panchayats, including ensuring proper use of allocated funds. 
  • Withdrawing financial powers of the Panchayat representative on corruption charges falls within the CEO’s jurisdiction. 
  • Consequently, the HC dismissed the petition filed by the sarpanch. 
• Legal and Governance Implications: 
  • Role of CEO in Panchayat Administration: The ruling clarifies the extent of powers of the CEO, District Panchayat, highlighting the supervisory role over Panchayat activities and safeguarding public funds. 
  • Checks Against Corruption: The decision reinforces administrative checks against corruption at the grassroots level by allowing timely intervention even before final adjudication in criminal cases. 
  • Balancing Due Process and Administrative Action: While the criminal case is pending, administrative authorities are empowered to take preventive measures to avoid misuse of funds, reflecting a balance between legal due process and governance accountability. 

Governance of Panchayti Raj Institutions (PRIs)  

• State Subject: Local governance falls under the jurisdiction of state governments, with PRIs operating as per respective State Panchayati Raj Acts.  
• Constitutional Framework:  
  • 73rd Constitutional Amendment Act (1992) established a three-tiered Panchayat system and mandated 1/3rd reservation for women, later increased to 50% in 21 states and 2 UTs.  
  • Article 243D provides for reservation for Scheduled Castes, Scheduled Tribes, and Backward Classes in PRIs.  
  • Article 40 of the Constitution, a Directive Principle of State Policy, mandates the State to establish village panchayats and grant them the necessary powers and authority to function as self-governing units.  
• The Panchayats Extension to Scheduled Areas (PESA) Act, 1996, grants Gram Sabhas in Scheduled Areas special powers to manage natural resources and protect tribal culture and livelihoods.