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SEC 226 (3)

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(Querist)
22 May 2010 Mr. Y was appointed as an auditor of PQR £td. for the year ended 31.3.2009 at Annual General Meeting
held on 16.08.2008. Mr. Y has been indebted to the company for sum of Rs. 10,000 as on 1.4.2008, the
opening date of accounting year which has been subject to his audit. However, Mr. Y having come to
know that he might be appointed as auditor, he repaid the amount on 10.8.2008. Is Mr. Y,auditor disqualified u/s 226 of the Companies Act, 1956.
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daya shankar singh

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daya shankar singh (Expert)
22 May 2010 The appointment of auditor will be valid because of the reason that, on the date of appointment he is not indebted to the company .
As per sec 226 of Companies Act,1956 an auditor shall be disqualified from being appointment only when they are indebted at the time of appointment or during the tenure as a auditor.
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CMA RV Padmakumar.A

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CMA RV Padmakumar.A (Expert)
22 May 2010 not disqualified...since he is not indebted to company at the time of appointment..
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