The Official Liquidator vs. A
Held
The Court allowed the application filed by the Official Liquidator. Regarding the first issue, the Court approved the allocation of the 28 companies to the three Chartered Accountant firms for auditing their half-yearly accounts for the period 01.10.2023 to 31.03.2024. The allocation was specified: companies at Sl.No.1 to 9 to the second auditor, Sl.No.10 to 18 to the third auditor, and Sl.No.19 to 28 to the first auditor. The audit fee was fixed at Rs. 500/- plus GST per company, in accordance with a previous order of the Court dated 08.04.2022. The Court also permitted the payment of these fees from the funds of the respective companies or, if insufficient, from the Official Liquidator's Estate and Establishment Fund, subject to reimbursement. Regarding the second issue, the Court permitted the Official Liquidator to dispense with the filing of half-yearly accounts and their audit for the 23 companies that had no receipts or payments during the specified period, as per Rule 300 of the Companies (Court) Rules, 1959. The Court ordered that costs would come out of the funds of the respective companies.
Facts
The Official Liquidator filed a Company Application seeking various reliefs concerning the audit of half-yearly accounts of 28 companies in liquidation for the period from 01.10.2023 to 31.03.2024. The application requested approval for the allocation of these companies to three Chartered Accountant firms for audit, with a specified fee of Rs. 500/- plus GST per company. It also sought permission to dispense with the filing of half-yearly accounts for 23 companies with no transactions during the period, and to allow payment of audit fees from company funds or the Official Liquidator's Estate and Establishment Fund. The application was filed in relation to Company Petition No. 34 of 1985, concerning the winding up of M/s. A.P. Carbides Ltd., and 27 other companies.
Key Issues
1. Whether the Court should approve the allocation of 28 companies (in liquidation) to three specified Chartered Accountant firms for the audit of their half-yearly accounts for the period 01.10.2023 to 31.03.2024, and fix the audit fee at Rs. 500/- plus GST per company, as per the Official Liquidator's application. The Official Liquidator argued for the necessity of this allocation and fee structure to comply with Section 462 of the Companies Act, 1956, and Rule 298 and Rule 302 of the Companies (Court) Rules, 1959. The revenue or State did not appear to have made any arguments as the matter was an application by the Official Liquidator before the High Court. 2. Whether the Court should permit the Official Liquidator to dispense with the filing of half-yearly accounts and their audit for 23 companies in liquidation that had no transactions of receipts and payments during the period 01.10.2023 to 31.03.2024. The Official Liquidator contended that Rule 300 of the Companies (Court) Rules, 1959, allows for such dispensation.
Sections Cited
Section 462, Rule 298, Rule 300, Rule 302
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Cause title — parties, addresses and appearances
The Court made the following Order:
This application is filed by the Official Liquidator seeking the following reliefs: i. to take this affidavit and facts stated herein on record. ii. to approve the allocation of 28 companies (in liquidation) as per Annexure-A to 3 Chartered Accountants viz., 1) M/s. Murthy & Kanth, Chartered Accountant, Hyderabad 2) M/s. Padmanabha Rao & Co., Chartered Accountant, Hyderabad 3) M/s. K.B.S. Associates, Chartered Accountant, Hyderabad proportionately (i.e., 9 companies each to two auditors at Sl.No.1 & Sl.No.2 and 10 companies to one auditor at Sl.No.3) or pass such other order as this Court may deem fit and proper for the audit of Half Yearly Accounts of such companies (In liquidation) for the period from 01.10.2023 to 31.03.2024. iii. to permit the Official Liqui
The judgment continues below.
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