M/S.Pennar Paterson Limited (In Prov.Liqn) vs. No Respondent

Facts

The Official Liquidator, attached to the High Court of Telangana and Andhra Pradesh, filed a Company Application under Section 462 of the Companies Act, 1956, read with Rules 298 and 306 of the Companies (Court) Rules, 1959. The application sought to take on record the half-yearly accounts of M/s Pennar Paterson Limited (in liquidation) for the period from April 1, 2024, to September 30, 2024, along with the Independent Auditors' Report dated February 9, 2026. Additionally, the Official Liquidator requested permission to pay an audit fee of Rs. 500/- plus GST to the auditors, M/s Murthy & Kanth, Chartered Accountants. The application also sought permission to meet the costs of the application from the company's funds or the Estate and Establishment Fund, subject to reimbursement.

Held

The Court held that the half-yearly accounts of M/s Pennar Paterson Limited (in liquidation) for the period from April 1, 2024, to September 30, 2024, along with the Independent Auditors' Report dated February 9, 2026, should be taken on record. The Court reasoned that this was a necessary step in the liquidation process. Furthermore, the Court granted permission to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditors, M/s Murthy & Kanth, Chartered Accountants. The Court also permitted the Official Liquidator to make this payment from the available funds of the company in liquidation, or from the Estate and Establishment Fund if the company's funds were insufficient, with the condition of reimbursement upon realization of the company's assets. The ratio decidendi is that the Court will grant necessary administrative approvals for the efficient conduct of liquidation proceedings, including payment of audit fees and associated costs, provided they are reasonable and in accordance with the law.

Key Issues

1. Whether the half-yearly accounts of the company in liquidation for the period April 1, 2024, to September 30, 2024, along with the Independent Auditors' Report dated February 9, 2026, should be taken on record? The petitioner (Official Liquidator) argued for taking the accounts and report on record to facilitate the company's liquidation proceedings. The revenue or State did not present any arguments as this was an application by the Official Liquidator for administrative approval. 2. Whether permission should be granted to pay an audit fee of Rs. 500/- plus GST to the auditors? The petitioner contended that this payment was necessary for the audit of the company's accounts. The revenue or State did not present any arguments. 3. Whether the costs of the application could be met from the company's funds or the Estate and Establishment Fund, subject to reimbursement? The petitioner argued for this provision to ensure the smooth functioning of the liquidation process. The revenue or State did not present any arguments.