The Gazette of India
EXTRAORDINARY
PART II—Section 2
PUBLISHED BY AUTHORITY
No. 7] NEW DELHI, FRIDAY, MARCH 4, I966/PHALGUNA 13, 1887
Separate paging is given to this Part in order that it may be filed
as a separate compilation.
RAJYA SABHA
The following Bill was introduced in the Rajya Sabha on the 4th March, 1966: —
Bill No. 1 of 1966.
A Bill further to amend the Companies Act 1956.
BE it enacted by Parliament in the Seventeenth Year of the Republic of India as follows: —
1. This Act may be called the Companies (Amendment) Act, 1966. Short title.
1 of 1956.
2. In section 224 of the Companies Act, 1956, after sub-section (2), the following proviso shall be inserted, namely: —
Amendment of Section 224.
"Provided that the same auditor or auditors shall not be re- appointed for more than two consecutive terms."
122 THE GAZETTE OF INDIA EXTHAORDINABY [PART II-^SBC. 2]STATEMENT OF OBJECTS AND REASONS
Under section 224 of the Companies Act, 1956, an auditor is appointed for a specified period of time. There is, however, no limit on the term for re-appointment of the auditor. Consequently, the same auditor may be appointed for any number of terms. If such a practice is followed, favouritism may creep in which may in its turn lead to improper audit. This can be eliminated to a large extent if an auditor is debarred from appointment for a period exfeerfintr thrpe VPOFB
Hence this Bill,
ARJUN ARORA.
B. N. BANERJEE,