Section 225(2)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 May 2013 section 225(2) of the Companies Act,1956 says that, On receipt of notice of such a resolution, the Company shall forthwith send a copy thereof to the retiring auditor.

I want to know that, who will send such resolution to the company?
and complete interpretation of this sub-section.

CS SIDDHARTHA BANIK

CS SIDDHARTHA BANIK (Expert)
Follow

29 May 2013 Any member (who is entitled to attend General Meeting) may move a special notice of passing a resolution to appoint a new auditor instead of the retiring one or providing expressly that retiring auditor should not be reappoint.

Hope you are satisfied with the answer.

Thanks,

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

29 May 2013 under sub-section(1), it is mentioned that special notice shall be required for a resolution st an annual general meeting appointing as auditor......not be re-appointed.
So, the duty to give such notice is of "the company" and as per the provisions of the ACT, notice of "any" general meeting shall be given by the company.
notice will be given by the company to the members of such resolution.
The notice in this sub-section(2) is a special notice or something else?
And, as per your answer, why the member(s) may give the notice?
And, you uses the word "may" which means it is not a compulsory provision? but the section says that company "shall" forthwith send a copy thereof to the retiring auditor which means it is a compulsory provision?

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
Follow

23 July 2025 You're raising thoughtful questions related to the interpretation of provisions under the Companies Act (presumably Indian Companies Act, 2013), especially regarding **special notice** and obligations around it. Let's break this down clearly:

---

### 📌 **1. Is the notice in sub-section (2) a special notice or something else?**

Yes, the notice referred to in **Section 140(4)(ii)** of the Companies Act, 2013 **is a special notice**. This provision governs the **removal of an auditor** before the expiry of their term and is read with **Section 115**, which defines "special notice".

So, when a member(s) propose a resolution for removal of an auditor (before term expiry), they must **give a special notice**, as per Section 115. This is not a regular general meeting notice.

---

### 📌 **2. Why *may* the members give the notice?**

Members **"may"** give such a notice **if they intend to move a resolution** for:

* Removing the auditor before term completion, or
* Appointing someone other than the retiring auditor at the AGM.

It’s **not mandatory** for members to do this in every general meeting. But **if** they wish to propose such a resolution, the special notice is a **precondition**.

So, the use of *"may"* reflects **conditionality**, not discretion:

> “If members want to propose such a resolution, they may do so by giving a special notice.”

---

### 📌 **3. Is the company's obligation to send the notice to the retiring auditor compulsory?**

Yes, **it is compulsory**.

As per **Section 140(4)(ii)**:

> "On receipt of the notice of such a resolution, the company shall forthwith send a copy thereof to the auditor concerned..."

The use of **"shall"** indicates a **mandatory obligation** on the company.

So the sequence is:

* Member gives **special notice** to the company.
* Company **must** send a copy of that special notice to the retiring auditor **forthwith** (i.e., without delay).

---

### ✅ Summary:

| Action | Provision | Nature |
| ----------------------------------------------------------------------- | ------------------------ | ------------------------------------------------------------ |
| Members giving special notice to propose auditor removal or replacement | Section 115 + 140(4)(ii) | **Discretionary** (i.e., "may" give if they wish to propose) |
| Company sending copy of special notice to retiring auditor | Section 140(4)(ii) | **Mandatory** ("shall send forthwith") |
| Type of notice | Defined in Section 115 | **Special notice** |

---

Let me know if you want a flowchart or illustration of this process!

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now