One of my client Company proposed to remove Statutory Auditor before his expiry of 5 years term, he was appointed as Statutory Auditor three to four months back in the AGM of 2019.
Now in pursuance of Section 140(1) of CA 2013, the Company had sent him a letter either requesting him to resign from the Company otherwise consider the said letter as an opportunity of being heard, In the said letter the company mentioned grounds for removal is due to his Attitude, Behavior, Approach and reasonably higher fees than market rates and the reply received from Auditor was not satisfactory, in the said letter he denied for resignation and asked the Company to begin process for removal and then send me an opportunity of being heard.
his letter is not in compliance with section 140(1) of CA 2013 as the opportunity of being heard was required to be given before commencement of any procedure u/s 140 and the Company has done same.
And now the Company directly wants to file Form ADT-2 for applying of RD Approval based on the above documents and simple grounds as given above, my question is as under:
1: weather RD has power to reject Form ADT-2 ?
2: In case of such rejection, what further action can the Company take ?
3: Upon such rejection, can the Company stop making payment to auditor for his audit fees ?
4: In case of rejection, why the Company is unwillingly forced to hire such an auditor which the Company and all concerned board members and shareholders dislike ?
5:In case of Rejection from RD, It will be treated as unhealthy and non co-operative statutory audit in which either statutory auditor wont get any fees or the Audit of the Company will be on halt due to decisive fault of RD, so who will bear the cost of this fault ?
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