The Official Liquidator vs. Nill

Held

The Court allowed the application. It permitted the Official Liquidator to appoint the three named Chartered Accountant firms to audit the accounts of the 41 companies in liquidation for the period April 1, 2022, to September 30, 2022. The allocation was specified: S.Nos. 1 to 14 to the first auditor, S.Nos. 15 to 28 to the second auditor, and S.Nos. 29 to 41 to the third auditor. The audit fee was fixed at Rs. 500/- plus GST per company. The Court also implicitly permitted the filing of 'No Receipts and Payments' affidavits for the 12 companies with no transactions, as this was part of the relief sought and granted. The reasoning was based on the statutory requirements for auditing company accounts in liquidation and the OL's role in managing these companies. The ratio decidendi is that the Court has the power to approve the appointment of auditors and fix their fees for companies in liquidation to ensure compliance with statutory obligations.

Facts

The Official Liquidator (OL) filed an application seeking approval to appoint three Chartered Accountant firms to audit the half-yearly accounts of 41 companies in liquidation for the period April 1, 2022, to September 30, 2022. The OL also sought permission to file affidavits of 'No Receipts and Payments' for 12 other companies that had no transactions during the same period. The application detailed the winding-up orders for each company and specified the proposed allocation of companies to the auditors. The OL requested approval for an audit fee of Rs. 500/- plus GST per company and permission to pay these fees from the respective companies' funds, or from the OL's Estate and Establishment Fund Account if company funds were insufficient, subject to reimbursement. The application was filed in relation to the winding up of M/s. A.P. Carbides Ltd. and 40 other companies.

Key Issues

1. Whether the Court should approve the allocation of 41 companies in liquidation to three specified Chartered Accountant firms for the audit of their half-yearly accounts for the period April 1, 2022, to September 30, 2022, and fix the audit fee at Rs. 500/- plus GST per company, as per the Official Liquidator's application under Section 462 of the Companies Act, 1956, read with Rule 298 and Rule 302 of the Companies (Court) Rules, 1959. Petitioner's Contentions: The Official Liquidator contended that the audit of half-yearly accounts is a statutory requirement under the Companies Act, 1956, and the Companies (Court) Rules, 1959. The OL sought to appoint Chartered Accountants for this purpose and proposed a fee structure. The OL also sought permission to file 'No Receipts and Payments' affidavits for companies with no transactions, as permitted by Rule 300 of the Companies (Court) Rules, 1959. Revenue/State's Contentions: No specific contentions were recorded for the revenue or state in the provided judgment.