Section 224 of the Companies Act, 1956

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udit sharma (Querist)
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08 November 2010 Any casual vacancy in the office of the Statutory Auditors of the Company caused otherwise than due to resignation of the Statutory Auditors can be filled by the Board of Directors and such Statutory Auditors will hold the office as such till the date of next Annual General Meeting. Now, whether the Statutory Auditor appointed to fill in the casual vacancy is required to file Form 23B with the Registrar? Section 224(1A) pertains to appointment of Statutory Auditor at the Annual General Meeting and not otherwise? If yes, whether we have to intimate the Auditors so appointed within 7 days of the Board Meeting and all the provisions of section 224(1A) will be applicable in case of appointment of Auditor appointed under section 224(6) of the Act?

udit sharma

udit sharma (Querist)
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08 November 2010 In my opinion there is no need to file Form 23B as section 224(1A) claerly provides that only the Auditor appointed under section 224(1)of the Companies Act, 1956 i.e. the Auditor apppointed at the AGM is required to file form 23B within 30 days from the date of receipt of intimation of his/ its appointment from the Company.

Howver, it is a good practice that the Statutory Auditor should give the details of his appointment in the prescribed Form 23B to the Registrar because the intentionof the MCA was to keep a check on the number of Companies in which he/she/it is serving as an Auditor. Moreover, in this case even if the Statutory Auditor gives the intimation ofhis appointment after the expiry of 30 days of the receiptof appointment at the Board Meeting, there will be no harm as no fees is payable on Form 23B!

Views of eminent experts are welcome!

Kindly clarify me if i am wrong in my interpretation!!!!!

Regards

Udit Sharma

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Ankur Garg

Ankur Garg (Expert)
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08 November 2010 Dear Sir,

Your observation is very true especially the interpretation about intention of law before introducing the concept of form 23B. As a professional this interpretation is very simple for me. But i know it is not a simple one for everyone.

So congrats for such clear vision and straight and unambiguous words.

Would request you to post the same in forum for everyone.

Best Regards

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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08 November 2010 It may be because of the above views that MCA has given two option viz., Yes / No for the mandatory clause 5(a) to e-form 23B
which mandates whether appointment was done at AGM to be answered by either of the above two options.

Thanks to Sharma Ji and Ankur Ji for enlighting the issue.

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