Introduction:
The Bombay High Court, in Chaitanya Suresh Kambli v. State of Maharashtra (Writ Petition No. 5120 of 2026), has delivered a significant judgment reaffirming the constitutional protection of the right to practice a profession under Article 19(1)(g) of the Constitution of India. A Division Bench comprising Justice Bharati Dangre and Justice Manjusha Deshpande held that neither the Maharashtra Co-operative Societies Act, 1960 nor the Maharashtra Co-operative Societies Rules, 1961 authorises the State Government to permanently debar an auditor from future empanelment merely because his name had been removed from an earlier panel. Consequently, the Court declared Clause 6(x) of the Commissioner’s Circular dated 1 April 2026, which imposed such a permanent disqualification, to be unsustainable and unconstitutional to that extent.
The writ petition was filed by a certified auditor who had earlier been empanelled by the State Government to conduct statutory audits of co-operative societies. During the empanelment period for 2024–2026, his name was removed from the panel. Subsequently, when the Commissioner initiated a fresh empanelment process for the period 2026–2028 through a circular dated 1 April 2026, the petitioner apprehended that his earlier depanelment would permanently disqualify him from even applying for inclusion in the new panel because of Clause 6(x) of the circular.
The petitioner challenged the validity of the clause, contending that the statutory scheme governing empanelment of auditors nowhere contemplated a permanent prohibition from future empanelment. He argued that while the authorities may remove an auditor from an existing panel for valid reasons, converting such removal into a lifelong professional disability amounted to imposing a punishment not sanctioned by law.
The dispute required the High Court to examine the scope of Sections 75 and 81 of the Maharashtra Co-operative Societies Act, 1960, together with Rule 69 of the Maharashtra Co-operative Societies Rules, 1961, and to determine whether executive instructions contained in an administrative circular could create a permanent disqualification absent any statutory authority.
The judgment assumes considerable significance for professionals regulated through statutory schemes. It reiterates that executive authorities cannot impose restrictions affecting the right to practice a profession beyond what is authorised by legislation, particularly where such restrictions have the effect of permanently excluding an individual from pursuing his occupation.
Arguments of the Parties:
The petitioner contended that his challenge was not directed against the earlier order removing his name from the panel of auditors for the period 2024–2026. Instead, the grievance centred upon the consequences flowing from Clause 6(x) of the Commissioner’s Circular dated 1 April 2026, which effectively rendered any previously depanelled auditor permanently ineligible for future empanelment.
It was argued that such a consequence had no statutory foundation. Counsel submitted that the Maharashtra Co-operative Societies Act and the Rules framed thereunder prescribe the qualifications, procedure, and eligibility for empanelment of auditors. However, neither the Act nor the Rules contain any provision creating a perpetual bar against an auditor whose name has once been removed from the panel.
The petitioner further submitted that removal from one panel and permanent exclusion from all future panels are entirely different legal consequences. While the authorities may be empowered to remove an auditor for misconduct or other valid reasons during a particular empanelment period, such removal cannot automatically translate into a lifelong prohibition unless expressly authorised by the parent legislation.
It was also argued that the impugned clause imposed a punishment that was grossly disproportionate. Permanent exclusion from empanelment deprived the petitioner of opportunities to practise his profession in an important segment of his field, thereby directly interfering with his constitutional right guaranteed under Article 19(1)(g) of the Constitution.
The petitioner emphasised that every fresh empanelment process constitutes an independent exercise requiring the competent authority to evaluate the eligibility and suitability of applicants on the basis of prevailing qualifications and relevant considerations. An earlier depanelment could perhaps be considered as one relevant factor while assessing suitability, but it could not operate as an absolute and irreversible disqualification forever.
On behalf of the State authorities, it was contended that empanelment of auditors serves an important public purpose because statutory audits of co-operative societies directly affect financial transparency and accountability. The Government therefore possesses the authority to prescribe eligibility conditions to ensure that only competent and trustworthy auditors are entrusted with such responsibilities.
The respondents sought to justify the circular as an administrative measure intended to maintain professional standards and safeguard the integrity of the auditing process. It was argued that an auditor who had already been removed from the panel had demonstrated conduct rendering him unsuitable for future empanelment.
The State maintained that executive instructions governing empanelment were intended to preserve public confidence in statutory audits and ensure that only deserving professionals remained eligible for appointment.
Thus, while the petitioner challenged the permanent disqualification as lacking statutory authority and violating constitutional rights, the respondents defended the circular as an administrative mechanism designed to maintain quality and integrity within the system of statutory audits.
Court’s Judgment:
The Division Bench undertook a detailed examination of the statutory framework governing appointment and empanelment of auditors under the Maharashtra Co-operative Societies Act and the corresponding Rules before testing the validity of the impugned clause.
The Court first referred to Sections 75 and 81 of the Maharashtra Co-operative Societies Act, 1960, which regulate maintenance of accounts and statutory audit of co-operative societies. It also examined Rule 69 of the Maharashtra Co-operative Societies Rules, 1961, which lays down the qualifications and conditions governing empanelment of auditors.
Upon analysing these provisions, the Bench found that neither the parent statute nor the subordinate legislation created any provision permanently barring an auditor from future empanelment merely because his name had once been removed from an earlier panel.
The Court observed that statutory interpretation must begin with the language employed by the Legislature. Where Parliament or the State Legislature intends to create a permanent disqualification affecting an individual’s professional rights, such intention must be clearly reflected in the statutory provisions. In the absence of such legislative mandate, executive authorities cannot introduce an additional disability through administrative instructions.
Justice Bharati Dangre and Justice Manjusha Deshpande noted that the Act authorises empanelment and also provides mechanisms regulating the conduct of auditors. However, these provisions do not contemplate lifelong exclusion from future empanelment.
The Court therefore concluded that the Commissioner’s Circular had travelled beyond the statutory framework by introducing a consequence that neither the Legislature nor the Rules had authorised.
The Bench then examined the constitutional implications of the impugned clause. It observed that empanelment as a statutory auditor constitutes an important aspect of the petitioner’s professional practice. Preventing a qualified auditor from participating in all future empanelment processes directly restricts his right to carry on his profession guaranteed under Article 19(1)(g) of the Constitution.
Although reasonable restrictions upon professional rights may be imposed in public interest, such restrictions must satisfy constitutional requirements of legality, proportionality, and statutory authority.
The Court held that permanent debarment represents one of the most severe consequences that can be imposed upon a professional. Such a lifelong prohibition substantially affects livelihood, professional reputation, and future employment opportunities.
Importantly, the Bench observed that where the Legislature itself has consciously refrained from providing permanent disqualification, the executive cannot create one by issuing administrative circulars. Executive instructions cannot enlarge statutory disabilities or curtail constitutional rights beyond the scope authorised by legislation.
The Court specifically held that Clause 6(x), insofar as it prohibited previously depanelled auditors from applying for future empanelment, was unsustainable because it lacked statutory support and imposed a disproportionate restriction upon professional freedom.
The Bench further clarified that earlier depanelment does not automatically erase a professional’s future prospects. Every fresh empanelment exercise should ordinarily involve an independent assessment based upon the eligibility criteria applicable during that recruitment cycle.
While previous conduct may be relevant in evaluating suitability where authorised by law, it cannot be treated as creating an irreversible disqualification in the absence of statutory sanction.
The Court emphasised that administrative authorities cannot presume that every instance of previous depanelment necessarily warrants permanent exclusion. Circumstances leading to removal may vary considerably from case to case. Some instances may involve minor procedural lapses capable of correction, whereas others may involve more serious misconduct. A blanket rule permanently excluding all previously depanelled auditors fails to recognise these distinctions and therefore operates arbitrarily.
Another important aspect of the judgment is its reaffirmation of the hierarchy between statutory provisions and executive instructions. Administrative circulars are intended to facilitate implementation of legislation; they cannot override, supplement, or alter the legislative scheme by introducing substantive disqualifications not contemplated by law.
The Court therefore declared that Clause 6(x) of the Circular dated 1 April 2026 was unconstitutional to the extent that it permanently prohibited previously depanelled auditors from applying for empanelment during the period 2026–2028.
However, the Bench did not issue any direction compelling the authorities to empanel the petitioner. Instead, it adopted a balanced approach by directing that if the petitioner submits an application pursuant to the fresh empanelment notification, his previous removal from the panel for the period 2024–2026 shall not be treated as an automatic disqualification.
The competent authority was directed to consider his application independently on its own merits in accordance with the provisions of the Act and the Rules, without being influenced by the unconstitutional clause contained in the circular.
The judgment thus reinforces several important constitutional principles. It reiterates that executive authorities must act strictly within the limits prescribed by legislation, that professional rights protected under Article 19(1)(g) cannot be curtailed through executive instructions lacking statutory authority, and that administrative penalties must remain proportionate to the object sought to be achieved.
Ultimately, the Bombay High Court struck an appropriate balance between maintaining professional standards in statutory audits and safeguarding the constitutional freedoms of qualified professionals. The ruling makes it clear that while authorities may regulate empanelment through valid statutory mechanisms, they cannot permanently deprive an individual of the opportunity to pursue his profession unless such a consequence is expressly authorised by law. The decision therefore stands as an important affirmation of constitutional protections against arbitrary executive action affecting professional livelihoods.