M/S. A.P. Steels LTD. And Various Companies (In Liqn) vs. Nil
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The Official Liquidator, attached to the High Court of Telangana and Andhra Pradesh, filed a Company Application seeking approval for the allocation of 87 companies in liquidation among three Chartered Accountants for the audit of their half-yearly accounts for the period 01.10.2025 to 31.03.2026. The application also sought permission to dispense with the appointment of auditors and audit for 41 companies with no receipts or payments, and for 3 companies with only expenses like court fee stamps and notary charges. Further, it requested permission to pay an audit fee of Rs. 500 plus GST per company and to utilize the Estate and Establishment Fund Account of the Official Liquidator if companies lacked sufficient funds. The Official Liquidator also sought exemption from filing annual/final accounts for FY 2025-26, citing the filing of audited half-yearly accounts.
Held
The Court held that the audit work for the period 01.10.2025 to 31.03.2026 needed to be done by the auditors for all companies, irrespective of whether there were transactions. It was reasoned that even in companies with no transactions, the auditor's work, though potentially less, is still required. Therefore, the Court permitted the Official Liquidator to seek assistance from the three specified firms of Chartered Accountants, allotting approximately 29 companies to each. The Court also permitted the payment of an audit fee of Rs. 500 plus GST per company to each auditor. Regarding the companies with no transactions or only expenses, the Court did not explicitly grant the exemption to dispense with the audit but implied that the auditor's work would be less. The Court did not expressly address the issue of exemption from filing annual/final accounts for FY 2025-26, but the order focuses on the audit of half-yearly accounts.
Key Issues
1. Whether the Court should approve the allocation of 87 companies in liquidation among three Chartered Accountants for the audit of half-yearly accounts for the period 01.10.2025 to 31.03.2026, and permit the Official Liquidator to pay an audit fee of Rs. 500 plus GST per company. 2. Whether the Court should permit dispensing with the appointment of auditors and the audit of half-yearly accounts for 41 companies with no receipts or payments, and for 3 companies with only expenses. 3. Whether the Court should grant exemption from filing annual/final accounts for FY 2025-26. Contentions of the Petitioner (Official Liquidator): The Official Liquidator argued that the allocation of companies and the audit fee were in line with previous orders of the Court, specifically citing an order dated 09.01.2026 in C.A.No.324/2025 in R.C.C. No.2/1995. They contended that for companies with no transactions or only minimal expenses, dispensing with the audit would be appropriate. Regarding annual accounts, it was argued that they are merely a combination of the two half-yearly statements and thus filing them separately would be redundant if the half-yearly accounts are filed and audited.
Sections Cited
Section 457, Section 462, Section 551
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Cause title — parties, addresses and appearances
The Court made the following: ORDER
IN THT HIGH COURT FOR THE STATE OF ]]ELANGANA AT HYDERABAD THE HON'BLE SMT. WSTICE T. MADH.A,VI DEVI COMPANY APPLICATION.No. 121 OF 2026 In RCC.No.2 OF 1995 DATE: L6.O6.2O26 Between: M,/s.A.P.Steels Ltd. & Various Compalies (in tiqn) ORDER ...Applicant This application is frled by tl e Offrcial Liquidator se eking relief as follows:- ' Take tn,s offidovit ond focts stated herein on record .-li:'-)r. ,i ii:t.ttion of 12i componies (in liqn) os per Anner,,Jre A arncng 3 - i r,-'rc', rr.- )..tentonts viz-, 1). M/s Murthy ond Konth, Chorteted Accountor,:, Ht.iri )rii,-i 2.i U/s Podmonabho Roo ond Co., Chortered Accountox-. ttvd.:rJa'-i,.1 :t tvl/s.K.B 5 Associotes Chortered Accountont, Hyde.obod an e .aurl bos:; ii,e., 29 companies eoch Auditor) or poss such other ordei cs this Honble r-.,1t. ::.,, 1221;; fii ond proper Jor the oudit oJ Half Yeorly Arcounts of such .c:i,27..,::: i;n Liouidotion)for the period lrom 01.10.2025 to 31.03.2026. Per..it ..., c:frc;oi Liqui(iotor to file the Audit Report of t1e Hof yeorly accaunis icr the period from 07.04.2025 to 37.03.2026 in respecT ol 87 iomDC. t; (rn liquidotion) before this Honble Court within 60 doys from rhe dot? .i t.: -e:c I ol the ;ome from the Chorteted Accountonts, sc ,illotted. io(? .\'- h,:ii :te27ly stotement of occounts for the period 0i.10.2025 lo 31 A32i).'6 or record os per Annexure-B in respect of 41 componies (in iiqur,loiis+) cs there ore no trcnsoctions of "receipls orrd Dcy,nents" in stich t'j.tispense vrith cppointment of ouCitor cnC oLi.'rt of such i:oI y zt:i; c:.'cu.',t; ior the cbove period.(stdted obove iri potd-4) t,tk? tk? ttali v'edrit stotement of occounts for the period from A1..10 2025 tc j1 ,): 2(,:'; '. .?.2rds tn resoect ol 3 componies (ln Liqn-) cs te. AnrlxLire C a,< | )?i. ,'.: ,:c.:i,;t Jna icuestment in such componies but ct lf expa.,jses 1j
--- 7 1X ouditor ond oudit of such hotl yeorly occounts for the ebove peicd (stoted obove in Wru-s) Permit the olficial Liquidotor to pov the oudit fee of Rs 500/ plus GST oer Compony (in tiquidotion) to the soid Choftered Accountonts in occordonce wilh the order of this Honble court doted 09'01 2a26 node in t L''No 324/2025 in RCC No 2/1995. Permit the Olficiol Liquidator to moke payment of iee to the soicl Auditots out of the funds of the respective Componies in liquidation ond in cose of Companies where sufftcient funds ore not ovoiloble' it moy be permitted to poy the fee from the Junds of the Estote and Estobiishment Fund Account of the officiol Liquidotot, subiect to reimbursement of ihe some from the funds of such Componies upon realizotion of assets of those componies' It is further submitted thot, holf-yeorty occounts of the compony (in lion) ore beinq filed regutarly os required under Section 462 oi the ccmponies Act' 1956' ond per se exemption moy be gronted for filing oJ onnuot/finol accounts lor the finoncial yeot 2025-26 os required under Sectian 551 cf the componies Act' USA, since the oudited holf-yeorly occounts for the hotf 'vearlv period from 01.04.2025 to 3O.Og'2025 & 07'7A'2025 to il"ai 2026 ore filed before the Hon'bte Court, ond the onnual occounts ore nothing bd! comb;noticn/mercer of the two holf yedrty finonciot stotements of the finonciol yeor 2025-26' order that the cost of this aPplication (court fee stomps ond notory chorges) do come out of the funds of the Compony in liquidotion; ond poss"'
Learned counsel for the Ofhcial Liquidalor has annexed a copv of the order passed by this Court apoointing au<litors t-o audit the half yearly accounts of various companies in irquidatron ir'ciuding tire modalities for fees to be paid with respect to companies under audit by categorizing the companies with respect to tlle number oI transactions in each company. He also further submits that the order dated 09.01.2026 in C.A.No'324 of 2O25 in RCC No 2 of 1995 annexeti at page Nos'6O to 64 of the application squarelv covers the subiect matter anci the similar order may be passed in this case'
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In view of the above lacts and circumstances and similar order being passed by this Coult and also on consideratio:r of the report of the Official Liquidator, I find that audit rn'ork for the period 01.1O.2025 to 31.03.2026 is required to be done by the auditors in similar with respect to each company, $'hether or not there are transactions, and in case there are no transactions in the accounts of particular company, the auditor's u'ork ma1 be less compared to others. However, for the purpose of the work to be carried out, in my view, thr: total number of companies t.e..87 companies are to be distributed equally between the three auditors.
The Official Liquidator. therefore, is permitted to seek assistance of the three auditors' tirms as listed in paragraph 3 cf the alhdavit by allotting to rhcm approrimately 29 eac}:. as shown in the annexures appendeci to il,e ario:ri':: and pa), to each auditor a fee quantihed {,r Rs.SOOi iRuor'es lr:i,e lJundred only) plus GST per companv and submit the auriiterl accou:rIS to the court for approval.
The (lomprrnv Apphcation is, accordingly, Miscellaneous petilions pending, if any, shall stand closed. //// ordered . M. MANJULA .,OINT REGISTRAR I T decrtou oFFtcER I I '\ --- -- - The Official Liquidator. attached to the Hon'ble High C;ourt of Telangana' and Andhra Pradesh' Vfls- n p Steels Ltd' & Various C;ompanies (ln Liqn ) otfice at 1st floor, corporate Bhawan, Bandlaguda, Nagole, Hyderabad - 500068 iil"i""girtr", of Companies, Ministry of Corporate Affairs' Government of t;;; );Y il;r corporate Bhawan, Nagole' Bandlagr-da' Thattiannaram V'r"ig" ";rr,nnaga,' lvlandal, Ranga -Reddy Districi' Telangana State Pin Code 500 680 2 d To,
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The Regional Director, South Eastern Region, Ministry of Corporate Affairs,3'd floor Corporate Bhawan, Nagole, Bandlaguda, Thattiannaram Village Hayathnagar MaMal, Ranga Reddy District Telangana State, Pin Code 500 680. 4. The Section Offrcer, O.S. Section, High Court at Hyderabad, for the State of Telangana.
One CC to Sri J. Sreenath Reddy, Counsel for Official Liquidator, High Court at Hyderabad.
Two CD Copies VH/BA @,
HIGH COURT DATED: 161OG12026 ORDER COMPA.No.121 ot 2026 IN RCC.NO.2 0F 1995 ORDERING THE GOMPANY APPLICATION I r S 1 tJL 2026 31 T t) Art ( r-) zo .b t I "\
Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.