M/S.Sri D.S.M Chit Funds Private Limited (In Liqn) vs. Nil
Facts
The Official Liquidator of M/s Sri D.S.M Chit Funds Private Limited (in liquidation) filed a Company Application before the High Court for the State of Telangana. The application sought to take on record the half-yearly accounts for the period 01.10.2023 to 31.03.2024, along with the Independent Auditors' Report dated 31.05.2025. The Official Liquidator also prayed for permission to pay an audit fee of Rs. 500/- plus GST to the auditors, M/s KBS and Associates, Chartered Accountants. Additionally, the application requested permission to meet the costs of the application from the company's 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 held that the half-yearly accounts of the subject company in liquidation for the period from 01.10.2023 to 31.03.2024, along with the Auditor's Report dated 31.05.2025, should be taken on record. The Court also granted permission to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditors. Furthermore, permission was accorded to 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 mentioned in the supporting affidavit and considered the filed accounts. The ratio decidendi is that necessary expenses incurred by the Official Liquidator for the proper administration and auditing of a company in liquidation are permissible and should be sanctioned by the Court.
Key Issues
1. Whether 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 31.05.2025, should be taken on record? The petitioner (Official Liquidator) argued that these documents are necessary for the proper administration of the company in liquidation. The revenue or State did not present any arguments on this issue as recorded in the judgment. 2. Whether permission should be granted to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditors? The petitioner contended that this fee is a necessary expense for auditing the company's accounts. The revenue or State did not present any arguments on this issue as recorded in the judgment. 3. Whether the Official Liquidator should be permitted to meet the costs of the application from the available funds of the company or the Estate and Establishment Fund, subject to reimbursement? The petitioner argued that these costs are incidental to the liquidation process. The revenue or State did not present any arguments on this issue as recorded in the judgment.
Sections Cited
Section 462, Rule 298, Rule 306
AI-generated summary — verify with the full judgment below
[ 31681 IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD fVONDAY,THE TWENTY SECOND DAY OF SEPTEIVBER TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE K.LAKSHMAN COMPANY APPLICATION NO: 206 OF 2025 IN C.P.No. 25 ot 2008 ln the matter of the Companies Act, 1956 And ln the matter of M/s Sri D.S.M Chit Funds Private Limited (in liqn), The Official Liquidator, attached to the Hon'ble High Court of Telangana, and Andhra Pradesh, 1st floor, Corporate Bhawan, Bandlaguda, Nagole, Hyderabad -500068 ...APPLICANT Application Under Section 462 of Companies Act, 1956 read with Rule 298 and Rule 306 of the Companies (Court) Rules 1959 praying that this Hon'ble Court may be pleased to : take the half-yearly accounts of the subject company (in liquidation) for the period from 01 .10.2023 lo 31 .03.2024, along with Independent Auditors Report dated 31 .05.2025 submitted on 09.06.2025 by lV/s. KBS and Associates, Chartered Accountants on record and permission may be accorded to make the payment of audit fee of Rs.500/- plus GST to the said aud itor. .cost of this application (Court fee Stamps and Notary Charges etc.,) may be permitted to be met out by the Official Liquidator f
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