M/S.Circar Paper Mills Limited (In Liqn) vs. No Respondent

Facts

The Official Liquidator, attached to the High Court for the State of Telangana, filed a Company Application seeking to take on record the half-yearly accounts of M/s Circar Paper Mills Limited (in liquidation) for the period from April 1, 2023, to September 30, 2023. The application also prayed for permission to pay an audit fee of Rs. 500/- plus GST to the independent auditors, M/s. Murthy and Kanth, Chartered Accountants. The Official Liquidator further sought permission to meet the costs of the application from the company's available funds or the Estate and Establishment Fund, subject to reimbursement upon realization of assets. The application was supported by an affidavit and argued by the Official Liquidator's counsel.

Held

The Court was satisfied with the reasons stated in the supporting affidavit and upon considering the half-yearly accounts filed by the Official Liquidator. Consequently, the Court ordered as follows: (a) The half-yearly accounts of the company in liquidation for the period April 1, 2023, to September 30, 2023, along with the Auditor's Report dated July 4, 2025, submitted on July 8, 2025, by M/s. Murthy & Kanth, Chartered Accountants, were taken on record. (b) Permission was accorded to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the Auditor. (c) Permission was also granted to the Official Liquidator to make the said payment from the available funds of the Company (in liquidation), or from the Estate and Establishment Fund account if no fund was available in the Company's account, subject to reimbursement from the funds of the Company (in liquidation) upon realization of its assets. The ratio decidendi is that the Court has the power to sanction such payments and account filings in the course of liquidation proceedings.

Key Issues

1. Whether the half-yearly accounts of the company in liquidation for the period April 1, 2023, to September 30, 2023, along with the Independent Auditors' Report dated July 4, 2025, submitted on July 8, 2025, should be taken on record. 2. Whether permission should be granted to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditors. 3. Whether permission should be granted to the Official Liquidator to meet the costs of the application from the company's funds or the Estate and Establishment Fund, subject to reimbursement. Contentions: Petitioner (Official Liquidator): The Official Liquidator argued for the approval of the accounts and the payment of audit fees and application costs, as detailed in the supporting affidavit and application. No specific provisions of the GST Act were explicitly argued by the petitioner, but the payment of GST was sought to be permitted. Revenue/State: No arguments were recorded on behalf of the Revenue or the State in the provided judgment.