Many professionals have been raising question on interpretation/ procedure for appointment of new auditor due the Casual Vacancy (By Resignation):-

Existing Auditor of the Company resigned w.e.f. 30/08/2016 and ADT-3 filed by such Auditor & intimated to Company. Board of Director appointed new Auditor w.e.f. 12/09/2016 for FY 15-16. Tenure of the new auditor will be upto subsequent AGM.  Audit for the FY 15-16 shall be done by new Auditor.  As per act company have to get approval of the members within 90 days from the date of recommendation of Board's Meeting for Auditor appointment.  Company is convening AGM on 30th September 2016 then following are the questions:

     i.       Whether Company required calling EGM before holding of AGM? If Company doesn’t call EGM whether appointment will be valid. Whether without holding of EGM new auditor will be allowed to sign Financial Statement?

    ii.        Whether Company required to file ADT-1 after appointment in Board Meeting or not?

Let’s first discuss the questions:
Whether Companies have to Call the EGM when AGM is falling within 90 days from the date of Board Meeting (in which auditor is appointed)? Some people have confusion in such situation for holding of EGM or AGM. If Company don’t hold EGM whether appointment of auditor shall be valid or not?

Statutory Provisions Contained Under the Act:
Provisions of the Companies Act, 2013 to the extent relevant for our discussion, are stated as under (with necessary comments and modifications, wherever felt necessary)

As stated in Section 139(8) Any casual vacancy in the office of a Statutory auditor shall— in the case of a company other than a company whose accounts are subject to audit by an auditor appointed by the Comptroller and Auditor-General of India, be filled by the Board of Directors within thirty days, but if such casual vacancy is as a result of the resignation of an auditor, such appointment shall also be approved by the company at a general meeting convened within three months of the recommendation of the Board and he shall hold the office till the conclusion of the next annual general meeting;

Interpretation Note:

As stated in Section 139(8) any casual vacancy in the office of Auditor due to resignation of auditor shall be filed by Board of Directors within 30 days and such appointment by Board shall also be approved by the Company at a general Meeting convened within 3 month of the recommendation of the Board.

It is pertinent to note that, in case of casual vacancy arising out of resignation of existing auditor, Board will appointment of an Individual or Audit Firm subject to approval of shareholder in General Meeting and the final authority to approve continuation of appointment of such individual or audit firm as Auditor remains with the members of the Company.

In such situation, the board shall appointment of an Individual or audit firm as auditor within 30 days of the date of casual vacancy and the shareholders shall appoint within 3 months from the date of such recommendation of the Board and the said Individual or Audit firm shall hold the office till conclusion of the next annual general meeting.


Hence, considering the provisions of Section 139(8)(i) one can opine that appointment of auditor in case of casual vacancy due to resignation of auditor by the Board of directors, such auditor shall remain operative during the period when the  General Meeting to be held for approval of continuation of appointment of such statutory auditor.

The statutory auditor during such period should be authorized to sign the certificates and issue the reports including singing of financial statement, as per the requirements of respective laws.

Any other opinion is also welcome for further clarity of the provision of the Companies Act.

Thus, here can opine that statutory auditor appointed in Board Meeting due to ‘casual vacancy by resignation’ can sign the financial statement, auditor report. His appointment shall valid and be approved in AGM (if AGM falling in 90 days period). Further, he may appoint for next 5 year in the AGM.

Remuneration: Section 142 of the Act prescribed that the remuneration of the auditor of a Company shall be fixed by members in General Meeting.

Whether Company required to file ADT-1 after appointment in Board Meeting or not?
Form Involved: There company is need to file ADT-1 for appointment of such auditor within 15 days of appointment in the Board Meeting.

Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at

Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION. This is only a knowledge sharing initiative and author do not intend to solicit any business or profession. 


  1. Worth article on time when it requires by most of people. Thanks.

  2. Worth article on time when it requires by most of people. Thanks.

  3. This explains it all, at least now future applicants will have an idea on how it really goes for the vacancy. Even the students of professional writing service are looking forward to make it to the cut.

  4. I Have still query, in this case as u have explained that the ADT-1 is required to be filed within 15 days of appointment by the Board. Now, whether in other case if one auditor resigns in month of april say 4th of april then still ADT-1 required to be filed after appointment of new auditor in board meeting?

  5. I think ADT-1 required to be file in EGM.

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  7. Auditor is hard, but very important job. Good auditor can literally save the company, so I hope you will find the proper person. I would recommend you not to be hurry and read reviews on first. You can find many interesting things there.

  8. Our statutory auditors are not peer review auditor and we got listed recently does this amounts to resignation of existing auditor or disqualification of auditor as only peer review auditor can do the audit of listed entity. Do we need to call general meeting within 3 month in this case

  9. I am having different view. If new Auditor signed the financial statements and auditor report for particular financial year and after that members does not approve appointment of new auditor then whether signed financial statements and auditor report for particular financial year shall be considered as invalid ??

    In order to avoid this situation it is advisable that new auditor shall sign the financial statements and auditor report once his appointment is approved by members at the general meeting in case of casual vacancy caused due to resignation of auditor.

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