In The Matter Of M/S.Monarch Finlease Limited. (In Liqn.) vs. No Respondent

Facts

The Official Liquidator, attached to the High Court for the State of Telangana and Andhra Pradesh, filed a Company Application seeking to take on record the half-yearly accounts of M/s. Monarch Finlease Limited (in liquidation) for the period from 01.10.2022 to 31.03.2023. The application also sought permission to make a payment of Rs. 500/- plus GST towards the audit fee to the auditors, M/s. KBS and Associates. The application was supported by an affidavit from the Official Liquidator and argued by their counsel. The Registrar of Companies and the Regional Director, Ministry of Corporate Affairs, were also listed as recipients of the order.

Held

The Court accepted the prayer of the Official Liquidator. It held that the half-yearly accounts and the auditors' reports submitted by M/s. KBS and Associates for the period 01.10.2022 to 31.03.2023 should be taken on record. The Court also implicitly granted permission for the payment of the audit fee, as the application was ordered accordingly. The reasoning was based on the perusal of the auditor's reports with the assistance of the counsel for the Official Liquidator. The ratio decidendi is that the High Court, in its winding-up jurisdiction, will facilitate the necessary procedural steps for the Official Liquidator to discharge their duties, including the acceptance of accounts and payment of professional fees, provided they are in order.

Key Issues

1. Whether the Court should take on record the half-yearly accounts and auditor's report of the company in liquidation for the period 01.10.2022 to 31.03.2023, as submitted by M/s. KBS and Associates. (Question of procedure) 2. Whether permission should be granted to the Official Liquidator to make the payment of audit fee of Rs. 500/- plus GST to the auditors from the available funds of the company in liquidation or the Estate and Establishment Fund. (Question of procedure) Petitioner's Arguments: The Official Liquidator, through their counsel, presented the half-yearly accounts and auditor's report and prayed for them to be taken on record. They also sought permission for the payment of audit fees. The arguments were based on the necessity of these steps for the proper winding up of the company. Revenue/State's Arguments: No arguments were recorded for the Revenue or State in the provided judgment.