2.2       Query

Appointment of auditors at an Extraordinary General Meeting held at a

place other than the registered office of the company

1.A firm of Chartered Accountants, M/s XYZ, was appointed as auditors in the Extraordinary General Meeting of a company on 26.4.1986, whereas the company in question had earlier appointed, in the first Board meeting dated 17.11.1983, another firm of Chartered Accountants, M/s. ABC, as auditors.

2.  M/s XYZ’s letter addressed to M/s. ABC for objections, as per the Code of Conduct, has been responded to by the latter, whereby they have claimed that the Extraordinary General Meeting held by the company is null and void owing to its place of meeting. The registered office of this company is situated at Hyderabad but the Extraordinary General Meeting was held at Madras. This objection of M/s ABC was clarified by M/s. XYZ stating that the restrictions as to place of meeting are applicable only to an annual general meeting held under section 166 and not to an Extraordinary General Meeting held under Section 169 of the Companies Act, 1956. M/s. ABC, in reply to this, have stated that they are referring the issue in question to the Institute for clarification. However, there was no further information in this regard.

3.The querist has sought the opinion of the Expert Advisory Committee whether a firm of Chartered Accountants can be appointed as auditors of a limited company in an Extraordinary General Meeting of the company held at a place outside the state in which it is registered? Can the limited company remove the earlier auditors appointed by the company in its first Board meeting held after incorporation in the above stated Extraordinary General Meeting held at a place outside the state in which it is registered?

                                                         Opinion                                                  February 23, 1987

1. The Committee notes that section 169 of the Companies act, 1956, does not require holding of an Extraordinary General Meeting in the city, town or village where the registered office of the company is situated.

2. The Committee is of the opinion that since there is no legal bar, the first auditors appointed by the Board of Directors can, as per section 224(5) of the Companies Act, be removed at an Extraordinary General Meeting and in their place some other auditor(s) can be appointed at that meeting, held at a place other than city, town etc., where the registered office of the company is situated, provided that the other relevant requirements of the Act, e.g., those of section 166, 169 etc., are met.

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