M/S. A.P. Steels LTD. And Various Companies (In Liqn) vs. No Respondent
Held
The Court held that the Official Liquidator is permitted to engage the services of M/s. T. Badrinath & Associates for auditing the Estate and Establishment Fund and Company Paid Staff Terminal Benefit Account for the financial year 2017-18. The Court considered the submissions made by the learned counsel for the Official Liquidator, particularly regarding the firm's prior satisfactory performance in auditing these accounts for previous financial years and their familiarity with the work. The Court also took into account the revised fee proposal of Rs. 40,000/- plus applicable GST, which was recommended by the Official Liquidator. The Court found this arrangement to be appropriate in the given facts and circumstances. The Company Application was accordingly ordered.
Facts
This Company Application was filed seeking permission from the High Court to appoint an auditor for the Estate and Establishment Fund Account and Company Paid Staff Terminal Benefit Fund account for the financial year 2017-18. The Official Liquidator called for expressions of interest from audit firms. Five firms responded with varying quotes. M/s. Padmanabha Rao & Co. quoted the lowest at Rs. 5,900/- including GST, but this was considered impractically low. M/s. Murthy & Kanth quoted Rs. 25,000/- plus taxes and uncertain pocket expenses. M/s. Dutt and Associates quoted Rs. 35,000/- plus GST. M/s. KBS & Associates quoted Rs. 40,000/- plus 18% GST. M/s. T. Badrinath & Associates quoted Rs. 45,000/- plus applicable GST.
Key Issues
1. Whether the Court should permit the Official Liquidator to appoint M/s. T. Badrinath & Associates to audit the specified accounts for the financial year 2017-18, considering their prior experience and revised fee proposal. The petitioner, through the Official Liquidator, argued that M/s. T. Badrinath & Associates had previously audited these accounts for financial years 2014-15 and 2015-16 for Rs. 35,000/- plus taxes, and their execution was satisfactory. The firm was familiar with the work. The Official Liquidator's counsel submitted that the firm had orally agreed to conduct the audit for 2017-18 at Rs. 40,000/- plus applicable taxes, and in view of their familiarity, the Official Liquidator recommended accepting their offer. The revenue or State did not present any arguments as this was a company application seeking administrative permission.
Sections Cited
None explicitly discussed or named as a point of contention, but GST is mentioned in relation to quoted fees.
AI-generated summary — verify with the full judgment below
THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM
COMPANY APPLICATION No.421 OF 2018 IN R.C.C.No.2 OF 1995
O R D E R :
This Company Application has been filed seeking permission of this Court to appoint Auditor to audit the Estate and Establishment Fund Account and Company Paid Staff Terminal Benefit Fund account for the financial year 2017-18. Pursuant to the directions given by this court, the expression of interest was called for from the auditors and in response to the same five firms have responded. One M/s. Padmanabha Rao & Co., Chartered Accountants, have quoted Rs.5,900/- including G.S.T. Though the amount quoted by the said Chartered Accountant firm appears to be the least, taking into consideration of the nature of the work involved and also taking into consideration of the conveyance charges, which are required to be incurred by the auditors to travel to the Official Liquidator’s Office, the amount quoted by the said Chartered Accountant firm is impracticably low, which throws doubt on the competency of the said firm to undertake the work by deputing competent and qualified persons from Begumpet to Nagole, where the office of the Official Liqui
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