Removal of Auditor before Expiry of Term
As per sub-section (7) of section 224, an auditor may be removed from office before the expiry of his term, by the company in a general meeting, obtaining the prior approval of the Central Government in that behalf except that such approval is not required for the removal of the first auditor appointed by the
Directors under the proviso to sub-section (5) of section 224. This is a very stringent provision to ensure that any auditor who is inconvenient to the management cannot be removed so easily. Such a provisions goes a long way to ensure independence of auditor. Thus, first auditor, appointed by the Board of Directors may be removed by merely passing an ordinary resolution. However, a nomination notice from a member of the company of at least 14 days is required for the appointment of any other person in his place.
