M/S. Nagarjuna Finance 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 (CA No. 24 of 2025) in the High Court. The application was filed under Section 462 of the Companies Act, 1956, read with Rules 298 and 306 of the Companies (Court) Rules, 1959. The primary prayer was to take on record the half-yearly accounts of M/s. Nagarjuna Finance Limited (in liquidation) for the period from 01.10.2022 to 31.03.2023, along with the Auditors' Report dated 01.11.2024 submitted by M/s. KBS and Associates, Chartered Accountants. The application also sought permission to make payment of audit fee of Rs. 50,000/- plus GST to the auditor and to meet the cost of the application from the company's funds or the Estate and Establishment Fund.

Held

The Court accepted the application filed by the Official Liquidator. It was held that the half-yearly accounts of M/s. Nagarjuna Finance Limited (in liquidation) for the period from 01.10.2022 to 31.03.2023, along with the Auditors' Report dated 01.11.2024 submitted by M/s. KBS and Associates, Chartered Accountants, should be taken on record. The Court also granted permission for the payment of the audit fee of Rs. 50,000/- plus GST to the auditor, and for the costs of the application to be met from the company's funds or the Estate and Establishment Fund. The reasoning was based on the perusal of the Auditors' Report and the assistance provided by the counsel for the Official Liquidator, indicating compliance with the necessary procedural requirements for liquidation proceedings. The ratio decidendi is that the High Court, in its supervisory role over liquidations, will approve routine procedural steps like taking accounts on record and allowing necessary expenses, provided they are in order.

Key Issues

1. Whether the Court should take on record the half-yearly accounts and the Auditors' Report of M/s. Nagarjuna Finance Limited (in liquidation) for the period 01.10.2022 to 31.03.2023, as submitted by the Official Liquidator. This issue turns on the procedural requirements for liquidations under the Companies Act, 1956, and the Companies (Court) Rules, 1959. Contentions: Petitioner (Official Liquidator): Argued for the acceptance of the application, seeking to place the accounts and report on record and to permit the payment of audit fees and application costs. Relied on the provisions of the Companies Act, 1956, and the Companies (Court) Rules, 1959, to justify the prayers made. Revenue/State: No arguments were recorded for the Revenue or State in the judgment.