Union Of India vs The Company Law Board on 13 August, 2013
17. The Learned Senior Advocate appearing for the Appellant also submitted that
the powers of the Central Government have been further impinged by the CLB by
removing the Statutory Auditor in the impugned Order. Section 224 (7) of the Act
provides that the only mechanism for removal of a Statutory Auditor appointed
under the said Section before expiry of the term, except as provided in the proviso to
4 [1996] 5 SCC 400
5 [1988] 4 SCC 31
6 [2007]2 SCC 230
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KPP 14 COAPPL 36 OF 2013
sub-section (5), requires the prior approval of the Central Government in this
behalf. It is submitted that in the cases of Basant Ram and Sons vs. Union of India7
and Devinder K. Jain vs. Union of India and others 8 , which concerned the removal of
statutory auditors under Section 224 (7) of the Act, the same was challenged by
filing Writ Petitions before the Delhi High Court and the CLB was not approached
for redressal under Section 224 (7) of the Act. It is therefore submitted that in the
public interest the Central Government has to protect the powers given to it by the
Legislature under the provisions of the Act. The non-compliance of statutory
provisions of Section 400 of the Act and the encroachment of the Central
Government's powers under Section 224 (7) of the Act, renders the impugned Order
redundant.