Registrar of Co-operative Societies lacks statutory power to blacklist Chartered Accountant firms under Bihar Co-operative Societies Act.

The petitioner, a Chartered Accountancy firm, challenged an order dated 07.03.2025 issued by the Registrar, Co-operative Societies, Bihar, which blacklisted and delisted the firm for five years

This followed a long procedural history where previous blacklisting orders (one for an indefinite period and another for 30 years) were quashed by the High Court in 2018 and 2024 due to violations of natural justice and proportionality

The current impugned order was based on alleged audit lapses regarding the "Srijan Scam" (Srijan Mahila Cooperative Society), where the firm supposedly overlooked financial irregularities

The petitioner contended that the Registrar lacked the statutory authority to blacklist a CA firm

Whether the Registrar, Cooperative Societies, Bihar, possesses the statutory power under the Bihar Cooperative Societies Act, 1935, or the Rules framed thereunder, to pass an order blacklisting a Chartered Accountant firm

The court examined Section 33 of the Bihar Cooperative Societies Act, 1935, which governs the audit of societies by auditors from a government-approved panel, including Chartered Accountants as defined under the Chartered Accountants Act, 1949

It also considered Rule 57(2) of the Bihar Cooperative Societies Rules, 1959, which allows the Registrar to revise audit reports

Crucially, the court recognized that professional misconduct of Chartered Accountants falls under the exclusive jurisdiction of the Institute of Chartered Accountants of India (ICAI) under the Chartered Accountants Act, 1949

The power to delist (remove from a specific departmental panel) was distinguished from the power to "blacklist" (a broader punitive prohibition)

The Court analyzed the statutory framework and found that while Section 33 empowers the Registrar to manage the panel of auditors and ensure audits are conducted, the Act does not explicitly grant the power to "blacklist" a firm

The Court noted that the Registrar’s authority, as per Departmental Circular No. 4234 dated 24.09.2005, is limited to "delisting" a firm from the department’s own empanelment list

The Court reasoned that any action regarding professional misconduct must be referred to the ICAI, as the Registrar is not a statutory authority under the Chartered Accountants Act, 1949

Consequently, while the Department could choose not to engage the firm (delisting), it exceeded its jurisdiction by formally "blacklisting" it for a fixed term without specific statutory backing

The writ petition was partly allowed; the impugned order dated 07.03.2025 (Annexure-10) was set aside specifically to the extent of the "blacklisting" of the petitioner-firm

The delisting from the departmental panel was not disturbed