M/S. Sri Laxmi Fibres Limited(In Liqn) vs. Nil

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, and Rules 298 and 306 of the Companies (Court) Rules, 1959. The application sought to take on record the half-yearly accounts of a company in liquidation for the period from April 1, 2023, to September 30, 2023, along with the Independent Auditors' Report. The Official Liquidator also prayed for permission to pay an audit fee of Rs. 500 plus GST to the auditors, M/s. Padmanabha Rao and Co., Chartered Accountants. Additionally, the application 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.

Held

The Court held that the half-yearly accounts of the subject company in liquidation for the period from April 1, 2023, to September 30, 2023, along with the Independent Auditors' Report dated May 27, 2025, submitted on June 3, 2025, by M/s. Padmanabha Rao & Co., Chartered Accountants, should be taken on record. The Court also accorded permission to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditor. Furthermore, permission was granted to the Official Liquidator to make this 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. This payment would be subject to reimbursement from the funds of the company in liquidation upon the realization of its assets. The Court was satisfied with the reasons mentioned in the supporting affidavit and considered the filed half-yearly accounts.

Key Issues

1. Whether the half-yearly accounts of the subject company (in liquidation) for the period from 01.04.2023 to 30.09.2023, along with the Independent Auditors' Report dated 27.05.2025, should be taken on record. 2. Whether permission should be accorded to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditors. 3. Whether the Official Liquidator should be permitted to meet the costs of the application from the available funds of the company (in liquidation) or the Estate and Establishment Fund account, subject to reimbursement. Contentions: Petitioner (Official Liquidator): The Official Liquidator argued that the application was filed in compliance with the relevant provisions of the Companies Act and Rules. The supporting affidavit provided the necessary reasons for the requested permissions. The auditor's report was submitted, and the audit fee was a necessary expense for the liquidation process. Revenue/State: No arguments were recorded on behalf of the Revenue or State in the judgment.