AUDITOR FINED FOR NOT ATTENDING THE AGM OF THE COMPANY ROC,KANPUR VS SEN HON LEE TECHNOLOGIES PVT. LTD.

 AUDITOR FINED FOR NOT ATTENDING THE AGM OF THE COMPANY  

ROC,KANPUR VS  SEN HON LEE TECHNOLOGIES PVT. LTD. 

SECTION 146 OF CA 2013 AUDITORS TO ATTEND GENERAL MEETING 

AUDITORS MUST ATTEND GENERAL MEETINGS UNLESS EXEMPTED, AND HAVE THE RIGHT TO BE HEARD ON MATTERS CONCERNING THEM AS THE AUDITOR. 

Section 146 of the Companies Act, 2013, requires a company to send all notices and communications about general meetings to its auditor, who must attend, either in person or through a qualified representative, and has the right to be heard on any business that concerns them. The auditor can be exempted from attending by the company. This section ensures the auditor can address questions and provide clarification on matters related to their audit work during the meeting.   

4.2 OF SECRETARIAL STANDARD-2 (SS-2) 

4.2 Auditors The Auditors, unless exempted by the company, shall, either by themselves or through their authorised representative, attend the General Meetings of the company and shall have the right to be heard at such Meetings on that part of the business which concerns them as Auditors. The authorised representative who attends the General Meeting of the company shall also be qualified to be an Auditor. 

NO EXEMPTION FOR THE AUDITORS IS GIVEN BY THE COMPANY IN THIS CASE . 

WHAT IS THE OFFENCE? 

The company held its AGMs in 2020 and 2021 without the auditor’s attendance — a clear violation of Section 146 and Point 4.2 of Secretarial Standard-2 (SS-2), which mandates the auditor’s presence at the Annual General Meeting. 

NON-COMPLIANE OF SECTION 118 (11)  

Under Section 118(11), such non-compliance attracts a penalty of ₹25,000 for the company and ₹5,000 for each officer in default. 

SECTION 450 OF THE ACT 

Section 450 of the Act provides that an auditor who fails to exercise reasonable diligence or contravenes certain provisions is liable for action. 

In this case, company was fined ₹40,000 for the Auditor’s non-attendance. 

MAJOR LEARNING FROM THIS CASE : 

 
1.Ensure your auditor attends every AGM — physical or virtual. 
2.Non-attendance is not just procedural — it’s a statutory breach. 
3. Secretarial Standards (SS-2) have legal force under Section 118(10). 
4,If Auditor is not able to attend , he is having two options. He can appoint a representative to attend GM on his behalf or he has to write to company to exempt him from attending GM. 

5. This case law highlights that compliance is not optional, it’s Mandatory. 

R V SECKAR FCS, LLB 79047 19295