M/S.Genius Financial Services Limited (In Liqn.) vs. No Respondent

Facts

The Official Liquidator, attached to the High Court for the State of Telangana and the State of Andhra Pradesh, filed Company Application No. 82 of 2023. The application sought permission to outsource the work of scrutiny of claims, quantification of dues, processing of notices, and preparation of statements of claims for M/s. Genius Financial Services Limited (in liquidation). The proposed fee for this work was Rs. 10,000 excluding GST. The application was filed under Section 460(a) of the Companies Act, 1956, read with Rule 9 of the Companies (Court) Rules, 1959. The Official Liquidator supported the application with an affidavit.

Held

The Court noted that the learned Standing Counsel for the Official Liquidator sought to withdraw the application. The reason provided for withdrawal was that the Office of the Official Liquidator had already initiated the process of payment of claims. Consequently, the Court dismissed Company Application No. 82 of 2023, along with all connected applications, as withdrawn. Any interim orders that may have been in place were vacated. The Court also stated that there would be no order as to costs.

Key Issues

1. Whether the Official Liquidator can outsource the work of claim scrutiny and processing to a firm of Chartered Accountants, and at what fee, under Section 460(a) of the Companies Act, 1956, and Rule 9 of the Companies (Court) Rules, 1959? The Petitioner (Official Liquidator) argued that outsourcing this work would be efficient and proper, proposing a fee of Rs. 10,000 excluding GST. The Petitioner sought permission to pay this fee from the company's funds in liquidation and for the costs of the application to be borne by the company's assets. The Revenue or State did not appear to have made any arguments as the application was withdrawn before substantive arguments were heard.