M/S.R.G.Foundry Forge Limited (In Liqn) vs. No Respondent

Facts

The Official Liquidator, attached to the High Court for the State of Telangana, filed a Company Application under Section 462 of the Companies Act, 1956, read with Rules 298 and 306 of the Companies (Court) Rules, 1959. The application sought permission to take on record the half-yearly accounts of M/s R.G. Foundry Forge Limited (in liquidation) for the period from 01.10.2023 to 31.03.2024, along with the independent Auditors' Report dated 31.05.2025. Additionally, the Official Liquidator prayed for permission to make payment of audit fee of Rs. 500/- plus GST to the auditors 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 argued by the Official Liquidator's counsel.

Held

The Court, having been satisfied with the reasons provided 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 R.G. Foundry Forge Limited (in liquidation) for the period from 01.10.2023 to 31.03.2024, 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 accorded 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 fund is 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 has the power to sanction such payments and take accounts on record to facilitate the orderly liquidation process, provided the application is supported by adequate reasons and documentation.

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 Auditors' Report dated 31.05.2025, should be taken on record, as prayed by the Official Liquidator under Section 462 of the Companies Act, 1956 and Rules 298 and 306 of 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, as requested. 3. Whether the Official Liquidator should be permitted to meet the costs of the application from the company's funds or the Estate and Establishment Fund, subject to reimbursement, as sought. Petitioner's Arguments: The Official Liquidator argued for the acceptance of the accounts and the auditor's report, and for permission to pay the audit fee and associated costs, citing the necessity for proper liquidation proceedings. The Official Liquidator relied on the supporting affidavit detailing the reasons for the application. Revenue/State Arguments: The judgment does not record any specific arguments from the revenue or state. The court proceeded to pass an order based on the Official Liquidator's application and submissions.