The Official Liquidator vs. A

Held

The Court allowed the company application as prayed for, with the exception of miscellaneous expenses. The Court permitted the Official Liquidator to take on record the half-yearly accounts of the company in liquidation for the period April 1, 2022, to September 30, 2022, along with the auditor's report dated December 27, 2023. The Court also granted permission for the payment of the audit fee of Rs. 500 plus GST. However, the request to permit miscellaneous expenses was denied due to the absence of detailed particulars and supporting evidence. The Court did not award costs. The ratio decidendi is that while statutory accounts and audit fees are permissible, expenses must be substantiated with details and evidence.

Facts

The Official Liquidator, as applicant, filed a company application seeking permission to take on record the half-yearly accounts of a company in liquidation for the period April 1, 2022, to September 30, 2022, along with the auditor's report dated December 27, 2023. The applicant also sought permission to pay an audit fee of Rs. 500 plus GST and to meet miscellaneous expenses from the company's funds or the Estate and Establishment Fund. The auditor, M/s. Murthy & Kanth, Chartered Accountants, had submitted their report on January 3, 2024, indicating no adverse comments on the company's accounts. The Court noted that while the audit fee could be permitted, miscellaneous expenses could not be allowed due to a lack of detail or evidence.

Key Issues

1. Whether the Court should permit the Official Liquidator to take on record the half-yearly accounts of the company in liquidation for the period April 1, 2022, to September 30, 2022, along with the auditor's report dated December 27, 2023, as per Section 462 of the Companies Act, 1956, read with Rules 298 and 306 of the Companies (Court) Rules, 1959? 2. Whether the Court should permit the payment of an audit fee of Rs. 500 plus GST to the chartered accountants appointed by the Court? 3. Whether the Court should permit the Official Liquidator to meet miscellaneous expenses from the company's funds or the Estate and Establishment Fund? Contentions: Petitioner (Official Liquidator): Argued for the acceptance of the half-yearly accounts and the auditor's report, and for permission to pay the audit fee and miscellaneous expenses. Relied on the auditor's report which stated no adverse comments on the accounts. Revenue/State: No arguments recorded from the revenue or state.