M/S. Oban Finance And Investments Limited.(In Liqn) vs. No Respondent

Facts

The Official Liquidator (OL) of M/s OBAN Finance & Investments Limited (in liquidation) filed a Company Application before the Telangana High Court. The application sought to take on record the half-yearly accounts of the company for the period 01.04.2022 to 30.09.2022, along with the Auditor's Report dated 17.06.2024. The OL also requested permission to pay the audit fee of Rs. 500/- plus GST to the auditors, M/s KBS and Associates, Chartered Accountants. Additionally, the OL sought permission to meet the costs of the application, such as court fee stamps and notary charges, from the company's available funds or the Estate and Establishment Fund if company funds were insufficient. The application was filed under Section 462 of the Companies Act, 1956, read with Rules 298 and 306 of the Companies (Court) Rules, 1959.

Held

The Court accepted the prayer made by the Official Liquidator. It ordered that the half-yearly accounts of the company 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 record. The Court also implicitly permitted the payment of audit fees and application costs as sought by the Official Liquidator, as the application was ordered accordingly without any specific disallowance. The reasoning was based on the routine procedural necessity of filing and recording such accounts and reports for companies under liquidation to ensure transparency and proper management of the company's affairs by the Official Liquidator. The ratio decidendi is that the High Court, in its company jurisdiction, will facilitate the necessary procedural steps for the liquidation process, including the acceptance of audited accounts and the payment of related professional fees.

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. This issue turns on the procedural requirements for winding up companies under the Companies Act, 1956 and the Companies (Court) Rules, 1959. The petitioner, the Official Liquidator, argued that these accounts and reports are necessary for the proper administration of the company in liquidation and that the application seeks to fulfill these procedural requirements. The revenue or State did not appear to have made any arguments in this matter as it was an application by the Official Liquidator concerning the company's accounts and audit fees.