Companies Act • Official Statutory Text & Practice Guide
Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2013
Section 146 of Companies Act: Corporate Governance & Statutory Compliance
Official Bare Act Text
Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary
All notices of, and other communications relating to, any general meeting shall be forwarded to the auditor of the company, and the auditor shall, unless otherwise exempted by the company, attend either by himself or through his authorised representative, who shall also be qualified to be an auditor, any general meeting and shall have right to be heard at such meeting on any part of the business which concerns him as the auditor.
Statutory Defined Terms in this Section:(Click any term for official legal definition)
Section 146 of the Companies Act, 2013 secures the statutory right and correlative duty of statutory auditors to receive general meeting notices, attend all general meetings unless explicitly exempted, and be heard on any part of the business concerning them as auditors.
Compulsory Notice Transmission: All notices of, and other communications relating to, any general meeting of a company must be forwarded to the statutory auditor of the company in the same manner as members.
Duty to Attend Unless Formally Exempted: The statutory auditor must attend all general meetings either personally or through an authorized representative who must also be a qualified Chartered Accountant, unless explicitly granted an exemption by the company.
Statutory Right to be Heard: The auditor possesses an inviolable statutory right to be heard at any general meeting on any part of the business which concerns him in his capacity as auditor of the company.
Key Landmark Precedents:
Re: Kingston Cotton Mill Co. (No. 2), [1896] 2 Ch 279 (CA): The celebrated English authority on the role of the auditor as a watchdog rather than a bloodhound, establishing that the auditor's direct interface with shareholders at meetings is crucial to testing the veracity of corporate accounts.
Deputy Commissioner of Income Tax v. P.E. Swaminathan, (1998) 94 Comp Cas 358 (Mad): The Madras High Court held that the auditor's statutory right to attend general meetings under company law is a fundamental governance pillar, and failure to issue notice to the auditor compromises the procedural regularity of the meeting.
Courtroom Practice & Strategic Litigation Guidance:
In contentious AGMs where accounting irregularities or off-balance sheet items are disputed, shareholders can invoke Section 146 to directly examine the statutory auditor on the floor of the meeting. Company secretarial teams must ensure that if the auditor is unable to attend, a formal written application for exemption and board approval is documented and minuted under SS-2 to avoid penal exposure under Section 147.
Legal Commentary & Landmark Judgments: Section 146
Section 146 of the Companies Act, 2013 secures the statutory right and correlative duty of statutory auditors to receive general meeting notices, attend all general meetings unless explicitly exempted, and be heard on any part of the business concerning them as auditors.
In contentious AGMs where accounting irregularities or off-balance sheet items are disputed, shareholders can invoke Section 146 to directly examine the statutory auditor on the floor of the meeting. Company secretarial teams must ensure that if the auditor is unable to attend, a formal written application for exemption and board approval is documented and minuted under SS-2 to avoid penal exposure under Section 147.