M/S. Suchitra Tele Tubes Limited(In Liqn) vs. No Respondent

Facts

The Official Liquidator, attached to the High Court for the State of Telangana and Andhra Pradesh, filed Company Application No. 267 of 2025. The application sought permission to take on record the half-yearly accounts of M/s. Suchitra Tele Tubes Limited (in liquidation) for the period from April 1, 2023, to September 30, 2023, along with the Independent Auditors' Report dated May 31, 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. The application further 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 heard by the High Court.

Held

The Court held that the half-yearly accounts of M/s. Suchitra Tele Tubes Limited (in liquidation) for the period from April 1, 2023, to September 30, 2023, along with the Independent Auditors' Report dated May 31, 2025, submitted on June 9, 2025, by M/s. KBS and Associates, Chartered Accountants, should be taken on record. The Court granted permission to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditor. 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 if no funds were available in the company's account. This payment is subject to reimbursement from the funds of the company (in liquidation) upon the realization of its assets. The Court was satisfied with the reasons mentioned in the affidavit filed by the Official Liquidator and considered the half-yearly accounts filed by him. The ratio decidendi is that the Court has the power to permit the Official Liquidator to incur necessary expenses, including audit fees with applicable GST, and to manage liquidation funds for such purposes, ensuring eventual reimbursement from company assets.

Key Issues

1. Whether the Court should take on record the half-yearly accounts of M/s. Suchitra Tele Tubes Limited (in liquidation) for the period from April 1, 2023, to September 30, 2023, along with the Independent Auditors' Report dated May 31, 2025. This issue turns on the procedural requirements for liquidations 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, M/s. KBS and Associates, Chartered Accountants. This issue concerns the authority of the Official Liquidator to incur such expenses and the applicability of GST on audit fees in the context of liquidation proceedings. 3. Whether permission should be granted to the Official Liquidator to meet the costs of the application from the available funds of the company (in liquidation) or the Estate and Establishment Fund, subject to reimbursement. This issue relates to the management of liquidation funds and the recovery of administrative expenses. Arguments for the Petitioner (Official Liquidator): The Official Liquidator, through his counsel, presented the half-yearly accounts and the auditor's report, seeking their acceptance by the Court. He also sought permission to pay the audit fee, including GST, and to utilize company funds for application costs, with a provision for reimbursement. Arguments for the Revenue/State: No specific arguments were recorded for the Revenue or State in the judgment.