Permanent Debarment Of Auditor From Future Empanelment Not Permissible Under Maharashtra Co-Operative Societies Act: High Court
Bharati Dangre & Manjusha Deshpande JJ
The Bombay High Court has held that neither the Maharashtra Co-operative Societies Act, 1960 nor the Maharashtra Co-operative Societies Rules, 1961 contemplate permanently debarring an auditor from future empanelment merely because his name was removed from an earlier panel. The Court further held that a clause in the Commissioner's Circular imposing such a permanent disqualification is unsustainable and violative of Article 19(1)(g) of the Constitution.
A Division Bench of Justice Bharati Dangre and Justice Manjusha Deshpande was hearing a writ petition filed by a certified auditor seeking a direction to the authorities to accept his application for empanelment. The petitioner apprehended that his earlier removal from the panel of auditors for the period 2024-2026 would be treated as a permanent disqualification. He contended that holding him permanently ineligible for inclusion in a fresh panel was disproportionate and violative of Article 19(1)(g).
Examining the statutory framework, the Court referred to Sections 75 and 81 of the Maharashtra Co-operative Societies Act, 1960 and Rule 69 of the Maharashtra Co-operative Societies Rules, 1961. It noted that neither the Act nor the Rules create a permanent embargo against future empanelment.
“We do not find any provision in the Act or the Rules, which will create a permanent embargo, once the name of the Auditor is removed from the panel… we find that imposition of a clause… which prohibit the persons like the petitioner, who are empanelled from applying to the State Government, when the applications are invited afresh for empanelment of the auditors for the year 2026-2028 to be unsustainable,” the Court remarked
The Court held that Clause 6(x) is clearly violative of Article 19(1)(g), as removing an auditor permanently from the list of auditors is a serious consequence, and definitely, neither Section 81 of the Co-operative Societies Act, nor Rule 69(1)(g) contemplate a permanent debarment.
The Court observed that the petitioner cannot be prohibited from participating in the process for empanelment of the auditors by the State Government pursuant to the Circular dated 1/4/2026, by which the process is initiated for empanelment for the year 2026-2028, merely on the ground that he was depaneled from the list of auditors for the year 2024-2026
Accordingly, the Court declared Clause 6(x) of the Circular dated 1 April 2026 unsustainable to that extent and directed that if the petitioner applied for empanelment for 2026-2028, his previous depanelment should not be treated as a disqualification and his application should be considered on its own merits.
Case Title: Chaitanya Suresh Kambli v. State of Maharashtra [Writ Petition No. 5120 of 2026]