M/S. Sri D.S.M Chit Funds Private Limited(In Liqn) vs. No Respondent

Facts

The Official Liquidator, attached to the High Court for the State of Telangana, filed a Company Application (CA No. 217 of 2025) under Section 462 of the Companies Act, 1956, seeking to take on record the half-yearly accounts of M/s D.S.M Chit Funds Private Limited (in liquidation) for the period from 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, Chartered Accountants, whose report was submitted on June 9, 2025. Additionally, 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.

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 D.S.M Chit Funds Private 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, were taken on record. b) Permission was accorded to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditor. c) Permission was 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 were available in the company's account, subject to reimbursement from the funds of the company upon realization of its assets. The ratio decidendi is that the court will grant permission for routine administrative expenses and payments related to the liquidation process, provided the supporting documentation is satisfactory and the funds are utilized appropriately.

Key Issues

1. Whether 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, should be taken on record. 2. Whether permission should be granted to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditors. 3. Whether permission should be granted to the Official Liquidator to meet the costs of the application from the company's funds or the Estate and Establishment Fund, subject to reimbursement. Arguments for the Petitioner (Official Liquidator): The Official Liquidator, through their counsel, presented the half-yearly accounts and the auditor's report, satisfying the court with the reasons stated in the supporting affidavit. They sought approval for the accounts, payment of audit fees, and permission to utilize available funds for application costs. Arguments for the Revenue/State: No arguments were recorded for the revenue or State in the judgment.