Section.140: Removal, Resignation and giving of special notice

1. The auditor appointed under section.139 may be removed before the expiry of his tenure only by a special resolution of the company, after obtaining the previous approval of the Central Government. Provided before taking action as mentioned, the said Auditor should be given a reasonable opportunity of being heard.

2. The auditor who has resigned from the Company shall file within a period of 30 days from the date of resignation in e-form ADT-3 with the Registrar and in case of the Companies as mentioned in Sec.135(5), the auditor shall also file such statement with the comptroller and auditor-general of India, indicating the reason and other facts as may be necessary.

3. If the auditor doesn’t comply with the above mentioned Section it will be punishable with fine which shall not be less than 30,000/- but which may extend to 5,00,000/-.

4. (i) Special notice shall be required for a resolution at an annual general meeting appointing as auditor a person other than a retiring auditor  or proving that a retiring auditor shall not be re-appointed, except where the retiring auditor has completed a consecutive tenure of five years or ten years as the case may be, as mentioned in Section.135(2).

(ii) On receipt of notice of such a resolution, the company shall forthwith send a copy thereof to the retiring auditor.

(iii) Where notice is given of such a resolution and the retiring auditor makes representation in writing to the company (within the reasonable time) and request the Company to forward the same to the members unless the representation is received too late:

a. Any notice of the resolution given to members of the Company, state the fact of the representation made by the Auditor.

b. Send a copy of the representation to every member to whom notice has been sent.

• If the copy of the representation is not sent because it has been received too late or on behalf of the Company’s default then the same thing has to be read at the ensuing meeting.
• If the copy of representation is not sent, then the same has to be filed with the registrar.
• If the tribunal is satisfied on an application  by the Company or an auditor that the rights conferred by the auditor has been abused then copy of the representation need not be sent and need not be read out at the meeting.

5. The tribunal either suo motu or an application made to it by Central Government or by any person concerned , if it is satisfied that auditor has acted in fraudulent manner, it may by order , direct the company to change the same and within 15 days direct the Company to appoint another Auditor.

Section.141: Eligibility, qualification and disqualification of auditors:

1. A person shall be appointed as an auditor of a Company only if he is a Chartered Accountant. A firm whereof majority of partners practising in India are qualified for appointment as aforesaid may be appointed by the firm name.

2. Where a firm including a limited Liability Partnership is appointed as an auditor of a company, only the partners who are qualified Chartered Accountants shall be authorised to act and sign on behalf of the firm.

• A body corporate other than a LLP
• An officer or employee of the company.
• A person who is a partner or who is in the employment, of an officer or employee of the Company.
• A person who is relative  or partner:

I. Is holding any security of or interest in the Company or its subsidiary or its holding or associate company or a subsidiary of such holding company, further provided that the relative may hold security or interest in the company of face value not exceeding 1000 or such sum as may be prescribed.

II. Is indebted to the company or its subsidiary or its holding or associate company or a subsidiary of such holding company, in excess of such amount as may be prescribed.

III. Has given guarantee or provided any security in connection with the indebtness to its holding, subsidiary and associate Company of such amount as may be prescribed.

e. a person or a firm who, whether directly or indirectly has business relationship with the company or its subsidiary or its holding or associate company or subsidiary of such holding company or associate company of such nature as may be prescribed.

4. Where a person appointed as an auditor of a company incurs any of the disqualification mentioned in Section.141(3) after his appointment, he shall vacate his office as such auditor and such vacation shall be deemed to be a casual vacancy.

Section.142 (Remuneration of auditors)

1. The remuneration of the auditor of a company shall be fixed in the general meeting or in such manner as may be determined therein. Provided the Board may fix the remuneration of first auditor appointed by it.

2. The remuneration under sub-section(1) shall be in addition to the fee payable to an auditor, including the expenses, if any, incurred by the auditor in connection with the audit of the company and any facility extended to him by he Company.

Section. 142 (Remuneration of Auditor)

1. The Remuneration of Auditor may be fixed in the general meeting or in such manner as may be determined. Although the Board can fix the remuneration of First Auditor.

2. The Expenses which is paid to the auditor is in addition to the audit we he carries out in the Company.

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

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