M/S. Rama Krishna Equity Funds Limited.(In Liqn) vs. No Respondent

Facts

The Official Liquidator, attached to the High Court of Telangana, filed a Company Application seeking to take on record the half-yearly accounts of M/s Rama Krishna Equity Funds Limited (in liquidation) for the period 01.04.2022 to 30.09.2022. The application also sought permission to pay an audit fee of Rs. 5000 plus GST to the auditors, M/s. KBS and Associates, Chartered Accountants, and to meet the costs of the application from the company's funds or the Estate and Establishment Fund. The application was supported by an affidavit and heard by the High Court.

Held

The Court accepted the prayer made by the Official Liquidator. It ordered that the half-yearly accounts of M/s Rama Krishna Equity Funds Limited (in liquidation) for the period 01.04.2022 to 30.09.2022, along with the Auditor's Report dated 17.06.2024 submitted by M/s. KBS and Associates, Chartered Accountants, be taken on file. The Court also implicitly approved the payment of audit fees and application costs by ordering the company application accordingly. The reasoning was based on the perusal of the auditor's reports with the assistance of the counsel for the Official Liquidator, indicating satisfaction with the submitted documents. The ratio decidendi is that when statutory accounts and reports are duly submitted by the Official Liquidator in a liquidation proceeding, the High Court will take them on record and permit necessary expenses related to the liquidation process.

Key Issues

1. Whether the Court should take on record the half-yearly accounts and the auditor's report of the company in liquidation for the period 01.04.2022 to 30.09.2022, as submitted by the Official Liquidator. The petitioner, the Official Liquidator, argued that the accounts and report were duly prepared and submitted as per statutory requirements. The revenue or State did not appear to have made any specific arguments recorded in the judgment, as the matter was presented by the Official Liquidator. The core of the issue was the acceptance and formal recording of these financial documents and the approval of associated expenses, including audit fees and application costs, in the context of a company undergoing liquidation proceedings.