In The Matter Of M/S.Krishi Engines Limited In Liqn. vs. The Official Liquidator

Facts

The Official Liquidator, attached to the High Court of Telangana and Andhra Pradesh, filed a Company Application (No. 33 of 2024) in the matter of M/S. Krishi Engines Limited (in liquidation). The application sought to take on record the half-yearly accounts of the company for the period from 01.04.2022 to 30.09.2022, along with the Auditor's Report dated 12.06.2024, submitted by M/s. Padmanabha Rao and Co., Chartered Accountants. The Official Liquidator also sought permission to make the payment of audit fee of Rs. 500/- plus GST and any miscellaneous expenses from the company's available funds or the Estate and Establishment Fund Account. 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 held that the prayer made by the Official Liquidator in the Company Application was accepted. The half-yearly accounts of M/S. Krishi Engines Limited (in liquidation) for the period from 01.04.2022 to 30.09.2022, along with the Auditor's Report dated 12.06.2024 submitted by M/s. Padmanabha Rao and Co., Chartered Accountants, were ordered to be taken on file. The Court also implicitly granted permission for the payment of audit fees and miscellaneous expenses by accepting the application which included such a prayer. The reasoning was based on the perusal of the Auditors' Reports with the assistance of the learned counsel for the Official Liquidator, indicating satisfaction with the submitted documents and the procedural propriety. The ratio decidendi is that the High Court, in its company jurisdiction, will facilitate the smooth functioning of the liquidation process by taking on record necessary financial statements and reports and permitting incidental expenses, provided they are in order and filed as per rules. The operative direction was to take the accounts and reports on file and order the Company Application accordingly.

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. 2. Whether permission should be granted to the Official Liquidator to make the payment of audit fee of Rs. 500/- plus GST and any miscellaneous expenses from the company's funds. The petitioner, the Official Liquidator, argued that the application was filed in accordance with the relevant provisions of the Companies Act, 1956, and the Companies (Court) Rules, 1959, to facilitate the proper winding up of the company. The petitioner sought the Court's approval to take on record the submitted financial documents and to allow for the payment of necessary professional fees. The revenue or State did not appear to have made any specific arguments recorded in the judgment, as the matter was presented and decided based on the Official Liquidator's application.