M/S. Midwest (I) Industries Limited (In Liqn) vs. No Respondent

Facts

The Official Liquidator, attached to the Telangana High Court, filed an application seeking permission to take on record the half-yearly accounts of M/s. Midwest (I) Industries Limited (in liquidation) for the period from April 1, 2023, to September 30, 2023. The application also sought permission to pay an audit fee of Rs. 500 plus GST to the independent auditors, M/s. Padmanabha Rao and Co., Chartered Accountants, whose report was submitted on June 3, 2025. Additionally, the Official Liquidator requested permission to meet the costs of the application from the company's available funds or the Estate and Establishment Fund, subject to reimbursement upon realization of assets. The application was supported by an affidavit and argued by the Official Liquidator's counsel.

Held

The Court, having been satisfied with the reasons mentioned in the supporting affidavit and having considered the half-yearly accounts filed by the Official Liquidator, ordered as follows: (a) The half-yearly accounts of the subject Company, which is in liquidation for the period from 01.04.2023 to 30.09.2023, along with the Independent Auditor's Report dated 27.05.2025 submitted on 03.06.2025 by M/s. Padmanabha Rao & Co., Chartered Accountants, are taken on record. (b) Permission is accorded to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the Auditor. (c) Permission is also accorded 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 fund is available in the Company's account, subject to reimbursement from the funds of Company (in liquidation) upon realization of its assets. The Court found no impediment to granting these permissions based on the provided documentation and arguments.

Key Issues

1. Whether the Court should take on record the half-yearly accounts of the company in liquidation for the period from 01.04.2023 to 30.09.2023, along with the Independent Auditor's Report dated 27.05.2025. 2. Whether permission should be granted to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditors. 3. Whether permission should be granted to meet the costs of the application from the available funds of the company or the Estate and Establishment Fund, subject to reimbursement. Contentions of the Petitioner (Official Liquidator): The Official Liquidator contended that the application was made in accordance with the Companies Act, 1956, and the Companies (Court) Rules, 1959. The supporting affidavit provided the necessary reasons for the reliefs sought. The auditor's report was submitted, and the audit fee was a necessary expense for the liquidation process. The costs of the application were also essential for the proper functioning of the liquidation proceedings. The revenue or State did not appear to have made any specific contentions as this was an application by the Official Liquidator for procedural approvals.