P L D 1972 Lahore 795 (PLP)

2. The respondent‑company let out a portion of their premise to the petitioner‑company for their office at the rate of Rs. 300 per month. The petitioner‑company claims that it did not pay any rent from 1‑1‑1970 to 1‑1‑1971 because the respondent‑company was in arrears regarding the fee-bills presented by the petitioner to the respondent and the former, therefore, wrote to the latter that the rent may be deducted from the fee due to the Company. When the amount claimed to be due as fees by the petitioner‑company became equal to the amount of the rent of the premises due from the petitioner to the respondent, the petitioner sent a cheque of Rs. 200 and later another cheque of Rs. 1,100 to the respondent towards the pay ment of rent.

3. It seems that the respondent‑company was not satisfied with this arrangement and, therefore, sent a letter to the petitioner along with a resolution passed by the Board of Directors on 14‑5‑ 1 971 calling an Extraordinary General Meeting of the Company to look into the outstanding bills of the petitioner. The date of the meeting was fixed as 10th of July 1971, and one of the items on the agenda was the appointment of new auditors for the year 1970.

4. The petitioner informed the respondent‑Company that this meeting was not in accordance with law. It seems, however, that the respondent decided not to pay any heed to this letter and duly held the General Meeting on the 14th of June 1971, and by a unanimous Resolution disqualified the petitioner‑firm for the year 1970 on account of indebtedness of the petitioner firm to the respondent‑company under section 144(5)(iv) of the Companies Act, 1913. Messrs Sheikh & Chaudhry were proposed to be appointed as Auditors for the year 1970.

5. The Resolution doing away with the services of the petitioner and the proposal to appoint new auditors was dubbed as illegal by the petitioners and has been challenged through this application under section 144 read with section 79 and Regulation 112 Table 'A' of the Companies Act.

6. The short question involved in this case is whether this Court has the power to grant. the relief prayed, i.e. restrain the respondent‑company‑ (a) from implementing the resolution dated 14‑6‑1971 terminating the services of the petitioner‑firm; and, (b) from holding the Extraordinary General Meeting for the appointment of Messrs Sheikh & Chaudhry Accountants.

7. Section 144 deals with the qualifications and appointment of Auditors. Subsection (3) provides that‑ "Every Company shall at each Annual General Meeting appoint an Auditor or Auditors to hold office until the next Annual General Meeting." This section only provides the qualifications and the tenure of service of an Auditor. It does not, however, lay down that if the Company chooses for one reason or the other to terminate the services of an. Auditor so appointed earlier than stipulated in the Resolution of appointment or the statutory period of one year, this Court has any jurisdiction under the Companies Act to stop, the Company from adopting such a course, however illegal it might be. In Cuff v. London & County Land & Building Co. Ltd. (106 L T R 285), it was held that‑ "It is the Company who have a duty imposed upon them to appoint the auditor to hold office till the next Annual General Meeting. Prima facie, it is his appointment; and if he is dismissed by the Company before then, be has the usual right of action for wrongful dismissal before the expiration of his term of office; and it may be that there will be an answer justifying the dismissal, but whether that be so or not, to say that he can enforce his services upon a Company which does not wish for them seems to me to be extravagant."

8. In the absence of any provision in section 144 of the Companies Act or in any other section of that Act empowering this Court to compel an unwilling Company to continue to retain the services of a Statutory auditor appointed by it during the continuance of the term of his office, I have no option but to hold that this petition is incompetent and is, therefore, dismissed as such with costs. K. B. A. Petition dismissed.