False “Nil” Statutory Dues and Non-Disclosure of Business Sources in Form 26 Amount to “Undue Influence” (Section 123(2)) Warranting Voidance of Election

Case: SRI C MUNIRAJU v. SRI S N SUBBAREDDY
Court: High Court of Karnataka at Bengaluru
Date: 16-02-2026
Coram: Hon’ble Mr. Justice M.G.S. Kamal
Proceeding: Election Petition No.4 of 2023 (R.P. Act, 1951 – Sections 80, 81, 100, 101 r/w 123)

1. Introduction

The petitioner (Sri C. Muniraju), a BJP candidate who lost the 2023 Karnataka Legislative Assembly election from 140–Bagepalli Assembly Constituency, challenged the election of the returned candidate, respondent No.1 (Sri S. N. Subbareddy), who contested on an Indian National Congress ticket and won by a margin of 19,179 votes.

The petition centered on alleged false declarations and non-disclosures in the returned candidate’s Form 26 affidavit (assets, liabilities, and statutory dues), asserted to constitute corrupt practice—notably “undue influence” under Section 123(2) of the Representation of the People Act, 1951—thus warranting voidance of the election under Section 100.

2. Summary of the Judgment

The Court partly allowed the election petition and held that respondent No.1’s election is liable to be set aside due to corrupt practice (“undue influence”) arising from substantial non-disclosures/false declarations in Form 26. However, it refused to declare the petitioner as duly elected under Section 101, chiefly due to lack of specific pleadings and proof and the fact that more than two candidates were in the fray.

Operative result

• Election set aside: Respondent No.1’s election from 140–Bagepalli is voided.
• No substitution: Petitioner not declared elected; fresh electoral steps would follow.
• Improper acceptance: Additional issue answered against the petitioner—nomination not held “improperly accepted”.

3. Analysis

3.1 What the Court found proved (the “substantial” defects)

After a granular issue-wise review, the Court treated the following as proved and substantial:

1. Non-disclosure of business entities and corresponding current account balances relating to respondent No.1 and his wife—specifically:
   • R and R Bar and Restaurant
   • Bhagini Residency
   • Srinivasa Wines
   • Bhagini Palace
   • Wholesale Liquor Proprietorship Concern
   • Wife’s “Mini Bar and Restaurant”
   The Court used the RBI Master Circular definition of “Current Account” as a form of “Demand Deposit” and treated it as falling within Form 26’s requirement to disclose “all other types of deposits”.
2. Non-disclosure of agricultural land—an extent of 2 acres 22.5 guntas in Sy.No.21 (Basabathanahalli), including non-disclosure of its approximate market value.
3. False declaration regarding the nature of land—converted (commercial) lands were declared as agricultural:
   • Dependent daughter’s land Sy.No.164 (Kothakote) converted on 26.05.2022 but shown as agricultural.
   • Respondent’s lands in Sy.Nos.173, 174, 138/2, 158/2, 172 and 157 (Kothakote) converted on 26.05.2022 but shown as agricultural.
   This also infected the “Approximate Current Market Value” declarations.
4. False “Nil” declaration of municipal/property tax dues (Form 26 Clause 8), notwithstanding significant arrears later paid (including about Rs.1,09,04,478/- in August 2023 and Rs.24,30,447/- on 24.07.2024). The Court held that property tax under the BBMP Act, 2020 is a self-assessed, statutorily due obligation and is not contingent on a “demand notice”.

3.2 Precedents Cited (and how they shaped the decision)

(A) Foundational voter’s right to know and mandatory disclosures

• UNION OF INDIA Vs. ASSOCIATION FOR DEMOCRATIC REFORMS AND OTHERS (2002)5 SCC 294: The Court invoked ADR to reaffirm that the voter’s right to know candidate antecedents is a constitutional facet of Article 19(1)(a). This supplied the normative baseline: Form 26 is not paperwork; it operationalizes democratic choice.
• PEOPLE'S UNION FOR CIVIL LIBERTIES (PUCL) Vs. UNION OF INDIA (2003) 4 SCC 399: The judgment relied on PUCL’s articulation of why assets and liabilities disclosure matters: enabling voters to assess potential misuse of office and financial integrity, and to compare assets pre- and post-tenure.

(B) Non-disclosure of assets as “undue influence” (corrupt practice)

• LOK PRAHARI Vs. UNION OF INDIA (2018) 4 SCC 699: This was pivotal. The Karnataka High Court adopted Lok Prahari’s holding that non-disclosure of assets and sources of income constitutes “undue influence” under Section 123(2). The Court used it to reject the defence that the petitioner must show direct voter-level interference in the traditional sense (threats/inducements).
• RUKMINI MADEGOWDA Vs. KARNATAKA STATE ELECTION COMMISSION (2022) 18 SCC 1: The Court drew on the dictum that a false declaration of assets constitutes corrupt practice, and endorsed a presumption-like approach that such falsity impacts the election. This supported the Court’s move away from requiring proof of how each voter would have voted.

(C) The “substantial vs inconsequential” filter and “people’s mandate” restraint

• AJMERA SHYAM Vs. KOVA LAXMI AND OTHERS, 2025 SCC ONLINE SC 1723: Respondent No.1 leaned heavily on Ajmera Shyam for restraint against a “pedantic” approach and for requiring substantiality. The High Court accepted the principle but distinguished on facts: here, the non-disclosures were not minor technical gaps but concerned core sources of income, land classification, and large statutory dues. The Court also relied on Ajmera Shyam in a different context to reject the “improper acceptance of nomination” ground, emphasizing the qualitative difference between pre-election scrutiny by the Returning Officer and post-election adjudication.
• KARIKHO KRI. Vs. NUNEY TAYANG AND OTHERS, 2024 SCC ONLINE SC 519: The Court used Karikho Kri to structure the inquiry into (i) substantial compliance and (ii) whether non-disclosure materially affected results, while also acknowledging that some defects can be insubstantial.
• KISAN SHANKAR KATHORE Vs. ARUN DATTATRAY SAWANT AND OTHERS (2014) 14 SCC 162: The High Court referred to Kathore particularly to distinguish cases where non-disclosed dues were tied to bona fide disputes. Here, there was no comparable dispute shown for property tax; hence, the omission was treated as a false declaration rather than a contestable liability.

(D) Declaring the petitioner elected under Section 101 (multi-candidate restraint)

• VISHWANATHA REDDY Vs. KONAPPA RUDRAPPA NADGOUDA AND OTHERS, 1968 SCC ONLINE SC 20: Petitioner invoked it to support being declared elected. The Court accepted its broad proposition but emphasized later jurisprudence limiting “court-picked substitution” in multi-candidate contests.
• VATAL NAGARAJ Vs. R. DAYANAND SAGAR (1975) 4 SCC 127: This supplied the stringent requirement: tainted votes must be quantified with “judicial assurance”. Courts cannot speculate about voting patterns; the candidate must “win an election itself”.
• THIRU JOHN Vs. THE RETURNING OFFICER AND OTHERS (1977) 3 SCC 540; D.K.SHARMA Vs. RAM SHARAN YADAV AND OTHERS 1993 Supp (2) 117; PRAKASH KHANDRE Vs. DR. VIJAY KUMAR KHANDRE AND OTHERS (2002) 5 SCC 568; MUNIRAJU GOWDA P.M. Vs. MUNIRATHNA AND OTHERS (2020) 10 SCC 192: These were relied on to refuse declaration of the petitioner as elected because multiple candidates contested and the petition lacked the necessary material facts for a Section 101 declaration.
• SYEDA NOOR FATIMA ZAIDI Vs. HEENA UROOZ AND OTHERS, 2024 SCC ONLINE SC 4104: Petitioner argued it weakens the “two candidates only” limitation; however, the High Court noted para 22 of the same decision clarifying it “shall not constitute precedent” on that point and thus declined to apply it to expand Section 101 relief.

Note: Although KRISHNAMOORTHY Vs. SHIVAKUMAR (2015) 3 SCC 467 was discussed by the respondent to narrow “undue influence”, the Court ultimately preferred the broader application in LOK PRAHARI Vs. UNION OF INDIA (2018) 4 SCC 699 (which expressly extended Krishnamoorthy’s logic to assets/source disclosures).

3.3 Legal Reasoning (how the Court reached voidance)

(i) From Form 26 defects to “corrupt practice” under Section 123(2)

The judgment’s central reasoning is that false or materially incomplete disclosures in Form 26 impair the voter’s constitutionally protected informational choice and therefore amount to “indirect interference” with electoral rights. Anchored in LOK PRAHARI Vs. UNION OF INDIA, the Court held that such non-disclosure constitutes “undue influence” under Section 123(2), attracting voidance under Section 100(1)(b).

Crucially, the Court rejected the respondent’s plea that the petitioner must plead and prove a traditional “interference” model (threats/pressure on identifiable electors). Instead, it treated the deprivation of material information itself as the wrongful “influence” on electoral choice.

(ii) “Substantiality” and why this case crossed the line

Accepting the caution in AJMERA SHYAM Vs. KOVA LAXMI AND OTHERS against invalidating elections for inconsequential mistakes, the Court nonetheless characterized the present lapses as consequential and substantial because they related to:

• Core sources of income (hotel/liquor businesses) and their banking channels (current accounts);
• Material immovable property omitted in extent and value (Sy.No.21);
• Misclassification of converted commercial lands as agricultural, impacting valuation and transparency;
• Large statutory dues (property tax arrears) falsely declared as “Nil”.

The Court framed a normative rule: “False statement or a false declaration, that too made on oath, inherently carries with it corrupt, deceitful, dishonest and fraudulent intent…”—thereby minimizing the scope for “oversight” defences once falsity is established.

(iii) “No demand notice” defence rejected for property tax

A major doctrinal contribution is the Court’s treatment of municipal/property tax dues: it held that under the Bruhat Bengaluru Mahanagara Palike Act, 2020 (notably Section 144(8) and Section 147), property tax is a primary, self-assessed, time-bound statutory obligation. A demand notice is relevant to recovery action, not to the existence of the due.

Consequently, declaring “Nil” dues in Form 26 while arrears existed—later paid in substantial sums—was treated as a false declaration of liabilities.

(iv) Why improper acceptance of nomination was rejected

On the Additional Issue, the Court held that Returning Officer scrutiny under Section 36 and the ECI handbook is largely confined to whether the affidavit is filed and columns are filled, not to adjudicating factual truth of complex asset-liability controversies. Drawing from AJMERA SHYAM Vs. KOVA LAXMI AND OTHERS, it emphasized the “people’s mandate” dimension in post-election challenges but concluded that such determinations are properly made in an election petition trial—not at the nomination stage.

3.4 Impact (future cases and electoral compliance)

• Heightened enforceability of “liabilities” disclosure: Candidates cannot safely rely on “no demand notice” arguments for municipal/property tax. Courts may treat undisclosed statutory arrears as substantial falsity, particularly when later payments reveal the magnitude.
• Business transparency in Form 26: The decision signals that non-disclosure of business entities and their demand-deposit/current-account footprints can be treated as non-disclosure of sources of income—not a peripheral omission.
• Land conversion misclassification is high-risk: Declaring converted commercial lands as agricultural may be treated as a deliberate misstatement affecting valuation and voter information.
• Section 101 relief remains narrow: Even where election is voided for corrupt practice, courts are unlikely to declare the runner-up elected in multi-candidate contests without specific pleadings and proof connecting corrupt practice to vote arithmetic.

4. Complex Concepts Simplified

• Form 26 affidavit: A mandatory sworn statement filed with nomination papers disclosing candidate’s criminal antecedents, assets, liabilities, and other particulars; it operationalizes the voter’s right to know.
• Corrupt practice – “Undue influence” (Section 123(2)): Traditionally includes threats or pressure that interfere with voting freedom. Post LOK PRAHARI Vs. UNION OF INDIA, courts may also treat material non-disclosure/false disclosure of assets/sources as “indirect interference” with electoral choice.
• “Substantial compliance” vs “technical defect”: Courts may overlook minor errors that do not meaningfully impair voter knowledge; but omissions that hide core sources of income, major assets, or significant liabilities are treated as substantial.
• Guideline value vs market value: “Approximate current market value” is not rigidly defined. The Court treated guideline value as a credible reference-point to test reasonableness, especially where land nature was misstated.
• Section 100 vs Section 101:
  • Section 100: Grounds to declare the returned candidate’s election void.
  • Section 101: Limited situations where someone else can be declared elected; usually requires arithmetic certainty and strong pleadings.

5. Conclusion

This decision reinforces a stringent, voter-centric approach to Form 26 integrity while maintaining restraint on substituting the electorate’s choice with a “court-picked” winner. It clarifies that:

• Material non-disclosure/false disclosure of sources of income, key assets, land nature, and statutory dues may constitute “undue influence” under Section 123(2) and justify voidance under Section 100(1)(b).
• Municipal/property tax dues exist independent of demand notices where the statute creates a self-assessment duty; a sworn “Nil” declaration in such circumstances can be treated as a serious falsehood.
• Even after voiding an election, Section 101 substitution is exceptional, especially in multi-candidate contests, and requires specific pleadings and proof rather than general assertions that voters “would have rejected” the returned candidate.