M/S. Republic Forge Co.Limited(In Liqn) vs. Nil

Facts

The Official Liquidator, attached to the High Court of Telangana, filed Company Application No. 108 of 2025 in R.C.C. No. 05 of 1997. The application sought to take on record the half-yearly accounts of M/s. Republic Forge Co. Limited (in liquidation) for the period from 01.04.2023 to 30.09.2023, along with the Independent Auditors Report dated 27.05.2025. 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 funds or the Estate and Establishment Fund, subject to reimbursement upon realization of assets.

Held

The Court, having satisfied with the reasons mentioned in the supporting affidavit and considering the half-yearly accounts filed by the Official Liquidator, ordered the application. The Court took on record the half-yearly accounts of M/s. Republic Forge Co. Limited (in liquidation) for the period from 01.04.2023 to 30.09.2023, along with the Independent Auditor's Report dated 27.05.2025. Permission was accorded to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditor. Furthermore, permission was granted to make the said 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, subject to reimbursement from the company's funds upon realization of its assets. The Court did not expressly leave any issue undecided. The ratio decidendi is that the High Court, in its company jurisdiction, can permit payment of statutory dues like GST on audit fees as part of the winding-up expenses, provided the application is supported by proper documentation and justification.

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. 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 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. Petitioner's Arguments: The Official Liquidator, representing the company in liquidation, presented the accounts and auditor's report and sought necessary permissions for payment of audit fees and application costs, citing the relevant provisions of the Companies Act, 1956, and the Companies (Court) Rules, 1959. The Official Liquidator argued that these payments are necessary for the proper winding up of the company. Revenue's Arguments: The judgment does not record any specific arguments from the revenue or state authorities regarding the payment of GST on audit fees or the costs of the application.