M/S.Lakshman Paper Mills Private Limited(In Liqn) vs. No Respondent

Facts

The Official Liquidator, attached to the High Court for the State of Telangana, filed a Company Application (No. 48 of 2025) 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 M/s. Lakshman Paper Mills Private Limited (in liquidation) for the period from October 1, 2022, to March 31, 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, whose report was submitted on December 16, 2024. The application further prayed for the costs of the application to be met from the company's funds or the Estate and Establishment Fund.

Held

The Court perused the auditor's report dated December 13, 2024, with the assistance of the counsel for the Official Liquidator. Being satisfied with the report, the Court ordered that the half-yearly accounts of the subject company (in liquidation) for the period from October 1, 2022, to March 31, 2023, along with the auditors' report, be taken on record. Permission was accorded to the Official Liquidator to make the payment of the audit fee of Rs. 500/- plus GST to the auditor. The costs of the application were directed to be met from the available funds of the Company (in liquidation). The Court also noted that there would be no order as to costs otherwise, and any pending miscellaneous petitions in the Company Application would stand closed. The core principle established is the Court's approval of the Official Liquidator's actions in managing the liquidation accounts and incurring necessary expenses like audit fees, provided they are in order and supported by the auditor's report.

Key Issues

1. Whether the half-yearly accounts of the company in liquidation for the period from October 1, 2022, to March 31, 2023, along with the Independent Auditors' Report dated December 13, 2024, should be taken on record. 2. Whether permission should be granted to the Official Liquidator to make the payment of audit fee of Rs. 500/- plus GST to the auditor. 3. Whether the costs of the application should be permitted to be met from the available funds of the company (in liquidation) or the Estate and Establishment Fund. The petitioner, the Official Liquidator, argued that the application was filed in accordance with the relevant provisions of the Companies Act and Rules, seeking necessary approvals for the proper conduct of the liquidation proceedings. The revenue or State did not appear to have made any specific arguments as the matter was an application by the Official Liquidator for administrative and financial approvals within the liquidation process.