M/S. Southern Pesticides Corporation Limited(In Liqn) vs. No Respondent

Facts

The Official Liquidator, attached to the High Court of Telangana and Andhra Pradesh, filed a Company Application seeking permission to take on record the half-yearly accounts of M/s. Southern Pesticides Corporation Limited (in liquidation) for the period April 1, 2023, to September 30, 2023. The application also sought permission to pay an audit fee of Rs. 500/- plus GST to the independent auditors, M/s KBS and Associates. The Official Liquidator requested that the costs of the application be met 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 heard by the High Court.

Held

The Court held that the half-yearly accounts of the subject company in liquidation for the period from April 1, 2023, to September 30, 2023, along with the Auditor's Report dated May 31, 2025, submitted on June 9, 2025, by M/s KBS & Associates, Chartered Accountants, are to be taken on record. The Court also accorded permission to the learned Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditor. Furthermore, permission was granted 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 funds of the company upon realization of its assets. The reasoning is based on the satisfaction with the reasons mentioned in the supporting affidavit and consideration of the filed accounts.

Key Issues

1. Whether the Court should accord permission to take on record 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. This issue turns on the Court's supervisory role over companies in liquidation under the Companies Act, 1956, and the Companies (Court) Rules, 1959. The petitioner's argument is implicit in the filing of the application seeking such permission. The revenue or State did not appear to have made any specific arguments on this point as recorded in the judgment. 2. Whether the Court should grant permission to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditors. This issue relates to the expenses incurred during the liquidation process and the authority of the Official Liquidator to disburse such fees, potentially under Section 462 of the Companies Act, 1956. The petitioner's argument is that this is a necessary expense for the liquidation process. The revenue or State did not appear to have made any specific arguments on this point as recorded in the judgment.