Śrīla Prabhupāda Says

On the qualification of a Spiritual Master

    

The answer to your Iṣṭagoṣṭhī questions are as follows:

     Unless one is a resident of Kṛṣṇa Loka, one cannot be a Spiritual Master. That is the first proposition. A layman cannot be a Spiritual Master, and if he becomes so then he will simply create disturbance. And who is a liberated person? One who knows Kṛṣṇa? It is stated in BG, fourth chapter, anyone who knows Kṛṣṇa in truth is immediately liberated, and after quitting the present body, he immediately goes to Kṛṣṇa. As soon as one is liberated he is immediately a resident of Kṛṣṇa Loki, and anyone who knows the truth of Kṛṣṇa can become Spiritual Master. That is the version of Lord Catania. So to summarize the whole thing, it is to be understood that a bona fide Spiritual Master is a resident of Kṛṣṇa Loki.

     Your next question, whether the Spiritual Master was formerly a conditioned soul, actually a bona fide Spiritual Master is never a conditioned soul. There are three kinds of liberated persons. They are called
1) sādhan siddha,

2) kripa siddha, and

3) nitya siddha.

     Sādhan siddha means one who has attained perfection by executing the regulative principles of devotional service. Kripa siddha means one who has attained perfection by the special mercy of Kṛṣṇa and the Spiritual Master, and nitya siddha means one who was never contaminated. The symptoms of nitya siddha is that from the beginning of his life he is attached to Kṛṣṇa and he is never tired of rendering service to Kṛṣṇa.

     So we have to know what is what by these symptoms. But when one is actually on the siddha platform there is no such distinction as to who is sādhan, kripa, or nitya siddha. When one is siddha, there is no distinction what is what. Just like when the river water glides down to the Atlantic Ocean nobody can distinguish which portion was the Hudson River or some other river. Neither is there any necessity to make any such distinction. Actually, every living entity is eternally uncontaminated, although he may be in the material touch. This is the version of the Vedas. Asaṅga ayam purusha—the living entity is uncontaminated. Just like when there is a drop of oil in water you can immediately distinguish the oil from the water, and the water never mixes with the oil. Similarly, a living entity, although in material contact, is always distinct from the matter.

      You are correct when you say that when the Spiritual Master speaks it should be taken that Kṛṣṇa is speaking. That is a fact. A Spiritual Master must be liberated. It does not matter if he has come from Kṛṣṇa Loka or he is liberated from here. But he must be liberated. The science of how one is liberated is explained above, but when one is liberated, there is no need of distinction whether he has come directly from Kṛṣṇa Loka or from the material world. But in the broader sense everyone comes from Kṛṣṇa Loka. When one forgets Kṛṣṇa he is conditioned, when one remembers Kṛṣṇa he is liberated. I hope this will clear up these points. I hope this will meet you in good health.

[Letter to Mukunda: New Vṛndāvan, 10 June 1969]