M/S. Merbanc Financial Services Limited (In Liqn) vs. No Respondent

Facts

The Official Liquidator, attached to the High Court of Telangana and Andhra Pradesh, filed a Company Application (No. 94 of 2025) in Company Petition No. 113 of 2002. The application sought permission to take on record the half-yearly accounts of M/s. Merbanc Financial Services Limited (in liquidation) for the period from April 1, 2023, to September 30, 2023. It also requested permission to pay an audit fee of Rs. 500 plus GST to the independent auditors, M/s. Padmanabha Rao and Co., Chartered Accountants. The Official Liquidator further sought 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 company assets.

Held

The Court held that the half-yearly accounts of M/s. Merbanc Financial Services Limited (in liquidation) for the period from 01.04.2023 to 30.09.2023, along with the Independent Auditors' Report dated 21.05.2025, submitted on 03.06.2025 by M/s. Padmanabha Rao & Co., Chartered Accountants, should be taken on record. The Court also granted permission to the Official Liquidator to pay an audit fee of Rs. 500 plus GST to the auditor. Furthermore, permission was accorded 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 was subject to reimbursement from the funds of the company upon realization of its assets. The Court was satisfied with the reasons presented in the supporting affidavit filed by the Official Liquidator.

Key Issues

1. Whether the half-yearly accounts of the company in liquidation for the period 01.04.2023 to 30.09.2023, along with the Independent Auditors' Report dated 27.05.2025, should be taken on record, as per the Companies Act, 1956 and the Companies (Court) Rules, 1959? 2. Whether permission should be granted to the Official Liquidator to pay an audit fee of Rs. 500 plus GST to the auditors, M/s. Padmanabha Rao and Co., Chartered Accountants? The Official Liquidator argued that the application was supported by an affidavit detailing the reasons for the requests. The revenue or State did not appear to have made any arguments as they were not a party to this specific application concerning the internal management and expenses of a company in liquidation. The Court was asked to consider the reasonableness of the expenses and the procedural compliance.