M/S. Reil Products Limited (In Liqn) vs. No Respondent

Facts

The Official Liquidator, attached to the High Court for the State of Telangana, filed a Company Application (No. 202 of 2025) under Section 462 of the Companies Act, 1956, read with Rules 298 and 306 of the Companies (Court) Rules, 1959. The application sought to take on record the half-yearly accounts of M/s REIL Products Limited (in liquidation) for the period from October 1, 2023, to March 31, 2024. It also requested permission to pay an audit fee of Rs. 500/- plus GST to the independent auditors, M/s KBS & Associates, and to meet the costs of the application from the company's funds or the Estate and Establishment Fund, subject to reimbursement. 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, which is in liquidation, for the period from October 1, 2023, to March 31, 2024, 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 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 the company's account is depleted, with the condition that such payments would be reimbursed from the company's funds upon realization of its assets. The Court was satisfied with the reasons mentioned in the supporting affidavit.

Key Issues

1. Whether the half-yearly accounts of the company in liquidation for the period October 1, 2023, to March 31, 2024, along with the Independent Auditors' Report dated May 31, 2025, submitted on June 9, 2025, should be taken on record. The petitioner (Official Liquidator) argued for the acceptance of these documents to facilitate the proper winding up of the company. The revenue or State did not present any arguments as this was an application by the Official Liquidator for administrative approval. 2. Whether permission should be granted to pay an audit fee of Rs. 500/- plus GST to the auditors. The petitioner contended that this fee is necessary for the audit of the company's accounts, which is a standard procedure in liquidation proceedings. The revenue or State did not present any arguments.