M/S. Vidyut Steels Limited(In Liqn) vs. Nil

Facts

The Official Liquidator, attached to the High Court for the State of Telangana, filed a Company Application seeking permission to take on record the half-yearly accounts of M/s. Vidyut Steels Limited (in liquidation) for the period from 01.04.2023 to 30.09.2023, along with the Independent Auditors' Report dated 31.05.2025. The application also sought permission to pay an audit fee of Rs. 500/- plus GST to the auditors, M/s. KBS and Associates, Chartered Accountants. Furthermore, the Official Liquidator requested 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 heard by the High Court.

Held

The Court, having been satisfied with the reasons stated in the supporting affidavit and having considered the half-yearly accounts filed by the Official Liquidator, ordered as follows: a) The half-yearly accounts of M/s. Vidyut Steels Limited (in liquidation) for the period from 01.04.2023 to 30.09.2023, along with the Auditor's Report dated 31.05.2025 submitted by M/s. KBS & Associates, Chartered Accountants, are taken on record. b) Permission is accorded to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the Auditor. c) Permission is 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 funds are 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 can grant permission for routine procedural matters in liquidation, including the acceptance of accounts, payment of audit fees (including GST), and meeting application costs from designated funds, to facilitate the efficient winding up of a company.

Key Issues

1. Whether the Court should take on record the half-yearly accounts of the company in liquidation for the period 01.04.2023 to 30.09.2023, along with the Independent Auditors' Report dated 31.05.2025. The Official Liquidator argued for the acceptance of these documents to proceed with the liquidation process. 2. Whether permission should be granted to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditors. The Official Liquidator contended that this payment is necessary for the audit services rendered. 3. Whether the costs of the application can be met from the company's funds or the Estate and Establishment Fund, subject to reimbursement. The Official Liquidator argued for this provision to ensure the smooth functioning of the liquidation process, especially if company funds are insufficient. The Revenue or State did not record any arguments.