Appointment of Auditor Other Than Retiring Auditor – Section 140(4)
## Appointment of Auditor Other Than Retiring Auditor
### When is a Special Notice Required?
A special notice must be given for a resolution at an AGM that proposes either:
1. Appointing a person other than the retiring auditor, OR
2. Expressly stating that the retiring auditor shall not be reappointed
### Step-by-Step Procedure
```
Special notice given by member
↓
Company sends copy to retiring auditor
↓
Retiring auditor may make written representation + request member notification
↓
[Two paths based on timing]
```
If representations received in time:
Company includes a statement in the AGM notice that representations have been made
Company sends a copy of representations to every member
If representations NOT sent (received too late OR company default):
Representations must be filed with the Registrar
Retiring auditor can require the representation to be read aloud at the AGM
### Tribunal Exception (Abuse of Rights)
If the Tribunal is satisfied (on application by the company or any aggrieved person) that the auditor is abusing the rights conferred by Section 140(4):
Copy of representation need not be sent to members
Representation need not be read out at the meeting
Worked example
### Example 1
Q: At the AGM of PQR Ltd, a shareholder proposes to appoint a new audit firm instead of the retiring auditor. The retiring auditor submits written representations to the company three weeks before the AGM. What must the company do?
A: Since representations were received in time, the company must: (1) state in the AGM notice that representations have been made, and (2) send a copy of the representations to every member.
### Example 2
Q: In the same scenario above, the company receives the retiring auditor's representation only one day before the AGM — too late to include in the member notice. What options does the retiring auditor have?
A: The representation must be filed with the Registrar. The retiring auditor may also require that the representation be read out at the AGM meeting.
⚠️ Common exam mistakes
Forgetting that special notice is required for BOTH scenarios: (i) appointing a new auditor AND (ii) expressly not reappointing the retiring auditor.
Thinking only the company can approach the Tribunal — any 'aggrieved person' can also apply to the Tribunal.
Assuming filing with the Registrar replaces the right to have representations read at the meeting — both remedies can apply simultaneously.
Confusing 'special notice' (given by a member to the company) with ordinary board resolutions.
Bare-Act text Section 140(4) · Companies Act, 2013 · click to expand
Special notice shall be required for a resolution at an annual general meeting appointing as auditor a person other than a retiring auditor, or providing expressly that a retiring auditor shall not be re-appointed, except where the retiring auditor has completed a consecutive tenure... On receipt of notice of such resolution, the company shall forthwith send a copy thereof to the retiring auditor. Where notice is given of such a resolution and the retiring auditor makes with respect thereto representation in writing to the company and requests its notification to members, the company shall... send a copy of the representation to every member... if a copy of the representation is not sent as aforesaid because it was received too late or because of the company's default, the auditor may require that the representation shall be read out at the meeting.