M/S.Kode Chit Fund Private Limited(In Liqn) vs. No Respondeont

Facts

The Official Liquidator, attached to the High Court of Telangana and Andhra Pradesh, filed a Company Application seeking to take on record the half-yearly accounts of M/s Kode Chit Fund Private Limited (in liquidation) for the period from April 1, 2023, to September 30, 2023. The application also prayed for permission to pay an audit fee of Rs. 500 plus GST to the auditors, M/s Murthy and Kanth, Chartered Accountants, and 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, having satisfied with the reasons provided in the supporting affidavit and considering the half-yearly accounts filed by the Official Liquidator, ordered as follows: a) The half-yearly accounts of the subject company in liquidation for the period from April 1, 2023, to September 30, 2023, along with the Auditor's Report dated May 27, 2025, submitted on June 3, 2025, by Murthy & Kanth, 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 Court did not expressly leave any issue undecided.

Key Issues

1. Whether the half-yearly accounts of the company in liquidation for the period April 1, 2023, to September 30, 2023, along with the Independent Auditor's Report dated July 4, 2025, should be taken on record. The Official Liquidator argued for this to be taken on record as part of the due process for managing the company's affairs during liquidation. 2. Whether permission should be granted 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 and is a legitimate expense of the liquidation process. 3. Whether the costs associated with the application, including court fee stamps and notary charges, can be met from the available funds of the company in liquidation or the Estate and Establishment Fund, with a provision for reimbursement. The Official Liquidator argued that these are incidental expenses required to facilitate the liquidation proceedings.