Auditors are the silent backbone of corporate credibility. When that backbone suddenly shifts due to resignation, death, or disqualification, companies can’t afford uncertainty. Section 139 of the Companies Act, 2013 primarily deals with auditor appointment, and Section 139(8) zooms in on one critical situation — casual vacancy in the office of an auditor.
In my experience, many companies know that a vacancy must be filled, but not how or by when. Section 139(8) provides the exact procedure to be followed in case of a vacancy, with different timelines for private companies, public companies, and government companies. Getting this right isn’t optional — it protects financial statements, board decisions, and regulatory trust.
What Is Section 139(8) of the Companies Act, 2013?
Section 139(8) deals with filling a casual vacancy in the office of an auditor. A casual vacancy arises when an auditor’s position becomes empty before the end of their term.
Common reasons include:
- Resignation
- Death
- Disqualification
- Inability to act
The law steps in to ensure that the audit function never stalls.
Understanding “Casual Vacancy” in Simple Terms
A casual vacancy is not the same as the expiry of an auditor’s term.
If an auditor completes their 5-year term — that’s a regular vacancy.
If they resign in the 3rd year — that’s a casual vacancy, and Section 139(8) applies.
Who Has the Power to Fill the Vacancy?
For Most Companies (Private & Non-Government Public Companies)
For the majority of companies, the Board of Directors must fill the vacancy within 30 days.
This immediate authority ensures:
- No gap in statutory audit
- Continuity of financial oversight
- Board-level responsibility
This applies whether the vacancy arose due to death or disqualification.
Special Case: Vacancy Due to Resignation
This is where Section 139(8) becomes more detailed.
If the casual vacancy is due to resignation:
- The Board appoints the auditor within 30 days
- That appointment must then be approved by shareholders at a general meeting within 3 months
- The auditor holds office till the conclusion of the next AGM
This dual approval protects shareholder interest when an auditor voluntarily steps down.
Government Companies & CAG-Audited Companies
For government companies or companies audited by the Comptroller and Auditor-General (CAG):
- The CAG fills the vacancy within 30 days
- If the CAG does not act within that time,
- The Board gets another 30 days to appoint the auditor
This layered approach respects public accountability while avoiding audit paralysis.
Link With First Auditor and AGM Appointments
Though Section 139(8) focuses on vacancies, it ties closely with the broader auditor framework.
The Act:
- Requires companies to appoint auditors at the first AGM
- Requires companies to appoint an auditor at the first annual meeting for a fixed term
- Uses Section 139(8) as a safeguard if something breaks mid-term
Think of it as a backup clause — rarely noticed until desperately needed.
Why the 30-Day Rule Is Crucial
In real life, missing this timeline can trigger:
- Non-compliance penalties
- Audit delays
- Qualification in audit reports
- ROC notices
I’ve personally seen companies assume “we’ll appoint at next AGM” — only to face regulatory questioning. Section 139(8) leaves no ambiguity on timing.
Key Compliance Steps Companies Must Follow
To stay compliant, companies should:
- Identify the cause of vacancy immediately
- Pass a Board Resolution within 30 days
- File necessary ROC forms (like ADT-1)
- Call a general meeting if resignation is involved
- Maintain proper documentation and disclosures
Section 139(8) provides the procedure to be followed in case of a vacancy — skipping steps is not an option.
Common Mistakes Companies Make
- Treating resignation like a normal vacancy
- Missing shareholder approval timeline
- Forgetting ROC filings
- Confusing Board authority with AGM power
These mistakes often stem from not reading Section 139(8) carefully enough.
Why Section 139(8) Matters Beyond Compliance
Auditors influence:
- Investor confidence
- Lending decisions
- Corporate governance ratings
Section 139(8) ensures that audit integrity doesn’t pause just because people change.
From a governance perspective, this section quietly protects every stakeholder.
Practical Insight From Experience
When an auditor resigns, emotions often run high — suspicion, urgency, pressure. Section 139(8) brings structure to that chaos. Companies that follow it calmly rarely face regulatory trouble later.
Conclusion
Section 139(8) of the Companies Act, 2013 exists for one simple reason — audits must never stop. By clearly defining who appoints the auditor, within what timeline, and with whose approval, it ensures continuity, accountability, and trust.
If your company ever faces an auditor vacancy, this section is your compliance roadmap — not a suggestion.
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Section 139(8) of the Companies Act, 2013 governs filling casual auditor vacancies, timelines for board and shareholder approval, and special rules for government companies.
