U/S 224(7) Companies Act, 1956 outlines the process for removing an auditor before the expiration of their term. An auditor appointed at an AGM can only be removed via a shareholder resolution at an EGM with the previous approval of the Central Government. The steps include: giving 14 days notice by a shareholder, obtaining eligibility certification for a new auditor, passing board resolutions, intimating the auditor in writing, holding an EGM to pass removal and appointment resolutions, applying to the Regional Director with supporting documents, and notifying the new auditor upon approval.

1. U/S 224(7) Companies Act, 1956
By:-
UTTMA SHUKLA

2. Law And Procedure for Removal Of Auditor(s)
Before Expiry Of His Term:
In terms of Section 224(7) of the Act, an auditor
appointed in an AGM may be removed from the office
before the expiry of his term by the company only in
general meeting after obtaining the previous approval
of the Central Government in this behalf except as
provided in proviso to section 224(5). (Now this power
is delegated to Regional Director under notification
no. G.S.R. 223(E) dated 18 March 2011.

3. The steps for removal of an auditor before the
expiry of his term is as follows:
 Step I:
A special notice of not less than 14 days
is to be given by a shareholder to the Company for
removal of the Auditor and appointment of new
auditor subsequent to the removal of Auditor.
 Step 2:
Obtaining a certificate in writing from the
new auditor to the effect of his eligibility to act as
auditor, if appointed;

4. Step 3:
Holding a board meeting of the Company to
pass the necessary resolutions to:
(i) consider the special notice for removal of Auditor
given by the shareholder and to decide the day, time and
place for calling the EGM;
(ii) to approve the draft notice of EGM and explanatory
statement thereof and to authorize the company
secretary or director of the Company to issue the notice;

5. (iii) to authorize the director or manager of the
Company to make an application to the Central
Government under Section 224(7) for removal of
the Auditor; and
(iv) to authorize the company secretary or director of
the Company to inform the Auditor of the decision of
the board of his removal.
 Step 4:
Intimate the Auditor of his removal in
writing along with a copy of the special notice as
given by the Shareholder.

6. Step 5:
Holding of EGM to pass the necessary
resolutions to:
(i) approve removal of the Auditor from the office of statutory
auditors of the Company;
(ii) appointment of new auditors subject to approval of regional
director to hold office until the conclusion of next AGM;
(iii) to authorize the director, company secretary or manager of
the Company to intimate the new auditor of his appointment; and
(iv) to authorize the director or manager of the Company to make
an application to the Central Government (Regional Director)
under Section 224(7) of the Act for removal of the Auditor.

7. Step 6:
Making application to the Regional Director
(Central Government) in whose jurisdiction the registered
office of the Company falls in e-Form No. 24A along with
the following documents:
 Copy of ordinary resolution;
 Copy of special notice under section 224(7) of the Act;
 Copy of the representation, if any, made by the Auditor.
 Grounds of making application for removal of Auditor.

8.  Step 7:
Upon receipt of approval from regional
director intimate the new auditor of his appointment as
an auditor of the Company to hold the office until the
conclusion of next Annual General Meeting.

9. THE END
THANK U