The Madhya Pradesh High Court recently confirmed that the Chief Executive Officer (CEO) of a Zila Panchayat has the authority to withdraw financial powers of a Sarpanch involved in corruption. This significant ruling was delivered by Justice Vishal Dhagat in the case of Manghu Baiga vs. State of Madhya Pradesh & Others on May 19, 2025.
The case arose after Manghu Baiga, a Sarpanch, was caught red-handed accepting a bribe of ₹50,000. Following this, the CEO of Zila Panchayat, Shahdol, issued an order dated January 17, 2024, transferring Baiga’s financial powers to the Panchayat Coordinator, Shri Rajbahor Saket of Janpad Panchayat Sohagpur.
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The petitioner challenged the order under Article 226 of the Constitution, arguing that it was passed without authority, and without granting a proper hearing. It was contended that mere registration of an FIR under the Prevention of Corruption Act, 1988 could not be the ground for such withdrawal. The petitioner’s counsel also highlighted that a show-cause notice was issued and replied to, but the final order was passed without proper consideration.
“The impugned order is passed without jurisdiction, without considering the reply, and violates the principles of natural justice,” the petitioner argued.
However, the respondents, including the State and the Superintendent of Police, asserted that due to serious allegations of corruption, the CEO was right in withdrawing the financial powers to protect Panchayat resources.
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The court examined the Madhya Pradesh Panchayat (Powers and Functions of Chief Executive Officer) Rules, 1995. As per Rule 4, the CEO has comprehensive powers to supervise and control Panchayat functions. This includes ensuring no financial or property loss to the Panchayat, drawing and disbursing funds, and initiating civil or criminal proceedings on behalf of the Panchayat.
Justice Vishal Dhagat noted:
“It is the duty of the Chief Executive Officer to ensure that no loss of money or property of Panchayat is caused. Therefore, the CEO, Zila Panchayat has the power to issue orders withdrawing financial powers of a Sarpanch found involved in a corruption case.”
The judgment also referred to Rule 4 sub-rule (xvi), empowering the CEO to address irregularities highlighted during audits. The court observed that the order was preventive in nature, aimed at protecting public funds, and well within the CEO’s legal powers.
“Action has been taken only to ensure against loss of money of Panchayat,” the court emphasized.
After evaluating all submissions and relevant laws, the High Court dismissed the writ petition.
Case Title: Manghu Baiga Versus State Of Madhya Pradesh And Others, Writ Petition No. 8657 Of 2025
Counsel for Petitioner: Advocate Akhilesh Kumar Singh
Counsel for Respondent/State: Advocate Shikha Sharma
Counsel for Respondent No. 2/SP: Advocate Abhinav Shrivastava and Siddharth Shrivastava
