Basant Ram & Sons & Anrs. vs Uoi & Ors. on 25 August, 2000
4. Secondly, the decision in Basant Ram & Sons (supra) does not help the cause of the petitioner inasmuch as that was a case where the removal was sought on the basis of a General Meeting held prior to the approval taken from the Central Government. The court observed that there was no statutory bar on a prior meeting being held, wherein the share-holders or the members approve the resolution for making the application to seek the previous consent of the Central Government. It was held that the Board of Directors were not authorised to remove the statutory auditors prior to expiry of its term except under the procedure provided under Section 224(7) of the said Act. The facts of the present case are entirely different. The decision that was taken on 12.07.2004 at the Board Meeting had no effect until and unless prior approval of the Central Government and subsequent confirmation in the General Meeting was granted. The decision of 12.07.2004 was only for the purpose of moving the application before the Central Government for grant of approval to remove the statutory auditors. Unless a decision is taken in the Board Meeting, the company cannot act on its own and it is only to this effect that the decision of the Board Meeting can be viewed.