My Sanskrit teacher, Dr. Sowmya Krishnapur, cited this shloka while teaching the Mritasanjivanam Natakam. The Sutradhara praises the learned and appreciative audience for their magnanimity in overlooking defects and praising the merits of the dramatic performance.
This shloka pretty much defines a great rasika, by taking the example of Lord Shiva.
गुणदोषौ बुधो गृह्णन्निन्दुक्ष्वेडाविवेश्वरः ।
शिरसः श्लाघते पूर्वं परं कण्ठे नियच्छति ॥
The learned man, who clearly comprehends the good and bad aspects of any performance or work, is like Lord Shiva who accepted both the crescent moon and the poison during the churning of the ocean. The wise Rasika openly appreciates the good aspects, like Lord Shiva displayed the moon prominently on his crest, while the defects are held back, like Shiva did with the poison in his throat.
