M/S.Ge Godavari Engineering Industries Limited (In Liqn) vs. No Respondent

Facts

This matter concerns a Company Application filed by the Official Liquidator of M/s GE Godavari Engineering Industries Limited (in liquidation). The application, filed under Section 462 of the Companies Act, 1956, read with Rules 298 and 306 of the Companies (Court) Rules, 1959, sought permission to take on record the half-yearly accounts of the company for the period 01.10.2023 to 31.03.2024, along with the Independent Auditors' Report dated 04.07.2025. Additionally, the Official Liquidator prayed for permission to pay an audit fee of Rs. 500/- plus GST to the auditors, M/s. Murthy and Kanu, Chartered Accountants, and to cover the court fees and notary charges for the application from the company's funds or the Estate and Establishment Fund.

Held

The Court, having considered the reasons mentioned in the supporting affidavit and the half-yearly accounts filed by the Official Liquidator, ordered the Company Application. Specifically, the Court took on record the half-yearly accounts of the subject company for the period from 01.10.2023 to 31.03.2024, along with the Auditor's Report dated 04.07.2025 submitted by M/s. Murthy & Kanu, Chartered Accountants. Furthermore, permission was accorded to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the Auditor. The Court also granted permission for the Official Liquidator to make this payment from the available funds of the Company (in liquidation), or from the Estate and Establishment Fund account if no funds were available in the company's account, subject to reimbursement from the company's funds upon realization of its assets. The Court was satisfied with the reasons presented and the procedural compliance.

Key Issues

1. Whether the Court should take on record the half-yearly accounts of the company in liquidation for the period 01.10.2023 to 31.03.2024, along with the Independent Auditors' Report dated 04.07.2025, as submitted by the Official Liquidator. This issue turns on the procedural requirements for winding up proceedings under the Companies Act, 1956 and the Companies (Court) Rules, 1959. 2. Whether permission should be granted to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditors. This issue involves the authority of the Court to permit such expenses during liquidation and the applicability of GST on such professional fees. 3. Whether the Official Liquidator should be permitted to defray the costs of the application, including court fee stamps and notary charges, from the available funds of the company in liquidation or the Estate and Establishment Fund. This issue concerns the management of liquidation expenses under the relevant rules. Arguments for the Petitioner (Official Liquidator): The Official Liquidator, through his counsel, presented the half-yearly accounts and auditor's report and sought the Court's approval. He also requested permission to pay the audit fee and application costs, citing the necessity of these expenses for the proper conduct of the liquidation proceedings. The Official Liquidator relied on the provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959 for his prayers.