Section 140. Removal, resignation of auditor and giving of special notice
(1) An auditor appointed under section 139 may be removed before expiry of term only by special resolution after obtaining previous approval of the Central Government in the prescribed manner, and after giving the auditor a reasonable opportunity of being heard.
(2) An auditor who resigns shall, within thirty days, file with the company and Registrar a statement in prescribed form setting out reasons and relevant facts and, in the case of a Government company, also with the Comptroller and Auditor-General.
(3) Failure to comply with sub-section (2) shall attract the prescribed penalty.
(4) Special notice is required for a resolution at an annual general meeting appointing as auditor a person other than the retiring auditor or expressly providing that the retiring auditor shall not be re-appointed, subject to the exceptions in section 139(2). The retiring auditor shall be given an opportunity to make representations, which shall be dealt with in the prescribed manner.
(5) The Tribunal may, on application by the Central Government or any person concerned, direct a company to change its auditor where the auditor has acted fraudulently or abetted or colluded in fraud. An auditor against whom a final order is passed shall not be eligible for appointment as auditor of any company for five years and shall be liable under section 447.
Explanation.—For this Chapter, auditor includes a firm of auditors.
