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As per Section 139(1) of the Companies Act 2013 Auditor of the Company appoints in the Annual General Meeting for a period of 5 (Five) years and his appointment shall be ratified in each Annual General Meeting during the tenure.

As per section 140(1) of the Act an auditor can be removed from his office before the expiry of his term by way of passing a special resolution in the general meeting of the Company after obtaining the previous approval of the Central Government.

Rule 7 of the Companies (Audit and Auditors) Rules 2014 prescribed the procedure to remove the auditor before the expiry of his term and as per the said rule a Board meeting is required to be held to pass the resolution in relation to the removal of the Auditor and within 30 days of such Board meeting an application shall be made to the Central Government (the power has been delegated to the Regional Director). Once the company receipt such approval then it shall hold a general meeting to pass the special resolution.

Now come to the practical difficulties- The application to the Regional Director is required to be made in Form ADT-2 with applicable fees. If we see the Column number 3 of the Form ADT-2 it is asking the following information.

a. Service request number of Form MGT-14.
b. Date of filing the Form MGT-14.
c. Date of passing the special resolution 

d. Date of the annual/extraordinary general meeting

So as per the Form ADT-2 until and unless the concerned company passes the special resolution in the general meeting, it will not be possible to make the application to the Regional Director. Further, it will be a violation of both section 140(1) along with rule 7 of the Companies (Audit and Auditors) Rules 2014.Since as per the said rule the company is required to obtain the approval at first then within 60( Sixty ) days of such approval it will go to it’s shareholders to obtain the approval by way of special resolution.

As per my view, it is nothing but a drafting error in the Companies Act 2013 and we have to follow the reverse method to complete the entire process of removal.

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