Sub section 8 of Section 139 of Companies Act 2013, provides
provision for casual vacancy in the office of the auditor. Casual vacancy of
Auditor may arise due to following two reasons:
ü Casual
vacancy due to reason other than resignation of Auditor.
ü Casual
vacancy arise due Resignation of Auditor.
Casual vacancy
due to reason other than resignation of Auditor:
If the casual vacancy
arises due to any reason other than resignation of the auditor than following
procedure & Provisions are required to follow:
1) Board
of Directors of the Company is required to appoint a Statutory Auditor in place
of previous Auditor within 30 days from the date of Casual vacancy.
2) The
Auditor so appointed by the Board, shall be the auditor of the company up to
ensuing Annual General Meeting from the date he is appointed and he shall be
liable to retire or may be re-appointed in the ensuing Annual General Meeting.
3) It
must be noted that casual vacancy of the auditor arisen due to reason other
than resignation may be merely filled by passing Circular Resolution and it is
not compulsory to hold Board meeting for appointment of auditor in order fill
the casual vacancy.
4) The
Board of Directors of the Company is required to File Form ADT-1 with the ROC
within in a period of 15 days from the date of appointment of auditor.
5) It
should be noted that Form ADT-3 is not required to be filled with ROC in the
case of casual vacancy due to reason other than resignation of the Auditor.
Casual vacancy
arises due to Resignation of Auditor:
If the casual vacancy
arises due to Resignation of the auditor than following procedure &
Provisions are required to follow:
1) Board
of Directors of the Company is required to appoint a Statutory Auditor in place
of previous Auditor within 30 days from the date of Casual vacancy.
2) It
must be noted that casual vacancy of the auditor arisen due to Resignation of
the auditor may be merely filled by passing Circular Resolution and it is not
compulsory to hold Board meeting for appointment of auditor in order fill the
casual vacancy.
3) Such
appointment shall be approved only by the Share Holders in their Extra-Ordinary
General Meeting. Therefore the company is
required to hold an Extra-Ordinary General Meeting within 90 days from date of
appointment of such auditor by the Board of Directors, for getting the consent
of the members by passing ordinary resolution.
4) The
Auditor so appointed, shall be the auditor of the company up to ensuing Annual
General Meeting from the date he is appointed and he shall be liable to retire
or may be re-appointed in the ensuing Annual General Meeting.
5) The
auditor resigning from his office before the expiry of his term of his term, needs to file Form ADT-3 along
with his resignation letter, with the ROC within 30 days from the date of his
resignation.
6) The
Board of Directors of the Company is required to File Form ADT-1with the ROC
within in a period of 15 days from the date of appointment of auditor In the
Extra-Ordinary General Meeting.
It must be noted that
Non-ratification of Auditor by Shareholders in Annual General Meeting also
considered as Casual Vacancy other than resignation of Auditor. There is no
Need to file MGT-14 in such case for appointment of Auditor
In case of a company
whose accounts are subject to audit by an auditor appointed by the Comptroller
and Auditor General of India, the power to fill any casual vacancy is vested
with the CAG. In case of a failure by the CAG to fill the casual vacancy within
a period of 30 days, the Board of Directors is required to fill the same with
within the next 30 days.
The
Auditor so appointed in a casual vacancy shall hold office until conclusion of
the next Annual General meeting.
Contributed by : Mohd Sharjeel Awasi, Company Secretary & CA Finalist from Sandeep Ahuja & Co
