Recovery for alleged financial irregularity cannot be imposed without inquiry and an opportunity of hearing.

The petitioner, a former Sarpanch, challenged an order dated 27 August 2018 passed under Section 92 of the Madhya Pradesh Panchayat Raj Avam Gram Swaraj Adhiniyam, 1993, which fastened liability on her for an alleged financial irregularity.

She alleged that the recovery order was made without an inquiry or a meaningful opportunity to be heard, and that she had been proceeded against ex parte.

The State filed no return, though it argued that she had been heard and that her partial deposit of the recoverable amount implied an admission of liability.

The petitioner also challenged orders dated 20 November 2018 and 22/30 November 2018; the Court noted that those orders had become otiose because her term as Sarpanch had ended.

Whether the recovery order under Section 92 could stand where the petitioner’s unrebutted pleadings alleged that it was made without an inquiry and without a proper opportunity to participate and be heard.

Whether the orders concerning the petitioner’s tenure and transfer of charge warranted relief after her term as Sarpanch had ended.

Section 92 of the Madhya Pradesh Panchayat Raj Avam Gram Swaraj Adhiniyam, 1993 was the statutory basis for the impugned recovery order; Section 40 was the stated basis for a separate order concerning the petitioner.

The Court applied the principles of natural justice, holding that where an order fastening financial liability has civil consequences, the affected person must be afforded due opportunity to participate and be heard before the authority passes its decision.

The judgment cites no judicial precedents.

The petitioner’s allegations that no inquiry had been held and that she was proceeded against ex parte were specifically pleaded and remained unrebutted because the State filed no return.

Given that the Section 92 order imposed financial liability and therefore had civil consequences, the Court held that the petitioner should receive an opportunity to participate in an inquiry and be heard before a fresh decision was made.

The State’s assertion that a partial deposit implied admission did not displace the Court’s conclusion on the need for a hearing.

The other challenged orders had lost their efficacy with the end of the petitioner’s term.

The exercise was directed to be completed within 90 days of the petitioner’s appearance; she was directed to appear on 16 October 2026.

The orders dated 20 November 2018 and 22/30 November 2018 were quashed as having lost their efficacy, and the petition was disposed of.