M/S. Nagarjuna Finance Limited(In Liqn) vs. Nil

Facts

This matter concerns Company Application No. 121 of 2025, filed by the Official Liquidator attached to the High Court of Telangana and Andhra Pradesh, in relation to M/s. Nagarjuna Finance Limited (in liquidation). The application, filed under Section 462 of the Companies Act, 1956, and Rules 298 and 306 of the Companies (Court) Rules, 1959, sought permission to take on record the half-yearly accounts of the company for the period 01.04.2023 to 30.09.2023, along with the Independent Auditor's Report dated 27.05.2025. Additionally, the Official Liquidator sought permission to pay an audit fee of Rs. 500/- plus GST to the auditor and to meet the costs of the application from the company's funds or the Estate and Establishment Fund.

Held

The Court, having been satisfied with the reasons stated in the supporting affidavit and having considered the half-yearly accounts filed by the Official Liquidator, ordered the application. Specifically, the Court took on record the half-yearly accounts of M/s. Nagarjuna Finance Limited (in liquidation) for the period 01.04.2023 to 30.09.2023, along with the Independent Auditor's Report dated 27.05.2025. Permission was also accorded to the Official Liquidator to pay the audit fee of Rs. 500/- plus GST to the auditor. Furthermore, the Court granted permission to the Official Liquidator to make this payment from the available funds of the company in liquidation, or from the Estate and Establishment Fund if company funds were insufficient, with a provision for reimbursement upon the realization of the company's assets. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the Court should take on record the half-yearly accounts of M/s. Nagarjuna Finance Limited (in liquidation) for the period 01.04.2023 to 30.09.2023, along with the Independent Auditor's Report dated 27.05.2025, as submitted by the Official Liquidator. The Official Liquidator argued that these documents were prepared and submitted in accordance with the relevant provisions of the Companies Act and Rules. 2. Whether permission should be granted to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditor. The Official Liquidator contended that this fee is reasonable and necessary for the proper conduct of the liquidation proceedings. 3. Whether the Official Liquidator should be permitted to meet the costs of the application from the available funds of the company or the Estate and Establishment Fund, subject to reimbursement upon realization of assets. The Official Liquidator submitted that this is a standard procedure to ensure the smooth functioning of the liquidation process.