XYZ Ltd., a prominent manufacturing company, is in the process of appointing a new auditor for the upcoming financial years. Mr. A is a renowned…

According to section 141 (3) (d) (ii) of the Companies Act, 2013, an auditor is disqualified to be appointed as an auditor if he or his relative or partner is indebted to the company, or its subsidiary, or its holding or associate company or a subsidiary of such holding company, in excess of 5Lacs. In this scenario: Mr. A's partner, Mr. B, has a debt of 4Lacs from EFG Ltd., a subsidiary of XYZ Ltd.Mr. A's relative, Ms. C, has a debt of 2Lacs from DEF Ltd., an associate company of XYZ Ltd. The total indebtedness linked to Mr. A's partner and relative is 6Lacs (4Lacs +2 Lacs), which exceeds the 5Lacs threshold mentioned in the provision. Therefore, Mr. A is disqualified from being appointed as the auditor of XYZ Ltd. under section 141 (3) (d) (ii) of the Companies Act, 2013, as the combined indebtedness of his partner and relative surpasses the permissible limit.