M/S.Turbo Bharath Limited (In Liqn.) vs. No Respondent

Facts

The Official Liquidator, attached to the High Court of Telangana and Andhra Pradesh, filed Company Application No. 76 of 2026 in Company Petition No. 151 of 2009. The application sought permission to take on record the half-yearly accounts of M/s. Turbo Bharath Limited (in liquidation) for the period from April 1, 2024, to September 30, 2024. It also requested permission to pay an audit fee of Rs. 500/- plus GST to the independent auditors, M/s. Padmanabha Rao & Co., Chartered Accountants, and to meet the costs of the application from the company's funds or the Estate and Establishment Fund. The application was supported by an affidavit from the Official Liquidator and was heard by the High Court.

Held

The Court allowed the application. Regarding the first issue, the Court ordered that the half-yearly accounts of the subject company (in liquidation) for the period from April 1, 2024, to September 30, 2024, along with the Independent Auditors' Report dated January 27, 2026, submitted on January 30, 2026, by M/s. Padmanabha Rao & Co., Chartered Accountants, be taken on record. For the second issue, the Court accorded permission to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditor. On the third issue, permission was also granted 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 funds were available in the company's account, subject to reimbursement from the funds of the Company (in liquidation) upon realization of its assets. The Court found merit in the reasons stated in the affidavit and considered the accounts filed by the Official Liquidator.

Key Issues

1. Whether the Court should take on record the half-yearly accounts of the company in liquidation for the period from April 1, 2024, to September 30, 2024, along with the Independent Auditors' Report dated January 27, 2026. The Official Liquidator argued for the acceptance of these accounts and report as part of the due process in managing the liquidation. The revenue or State did not appear to have made any arguments as the matter pertains to the internal administration of a company in 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 fee is necessary for the auditors' services in preparing the report and that GST is a statutory levy. No arguments were recorded from the revenue or State on this point. 3. Whether the costs of the application, including court fee stamps and notary charges, can be met from the company's available funds or the Estate and Establishment Fund, subject to reimbursement. The Official Liquidator argued for this provision to ensure the smooth functioning of the liquidation process, especially if the company's funds are insufficient.