Ap Steels LTD vs. No Respondent

Facts

The Official Liquidator, attached to the High Court of Telangana and Andhra Pradesh, filed a Company Application under Section 462 of the Companies Act, 1956, read with relevant Rules. The application sought the appointment of an auditor for the Estate and Establishment Fund Account and the Company Paid Staff Terminal Benefit Fund Account for the financial year 2022-23 (April 1, 2022, to March 31, 2023). The Official Liquidator also requested the Court to fix an audit fee of Rs. 40,000/- plus applicable GST, and to permit the payment of this fee and other miscellaneous expenses from the Estate and Establishment Fund Account. The application was supported by an affidavit and heard by the High Court.

Held

The Court appointed M/s. Murthy & Kanth, Chartered Accountants, to audit the Estate and Establishment Fund Account and the Company Paid Staff Terminal Benefit Fund Account for the financial year 2022-23 (April 1, 2022, to March 31, 2023). The Court approved the audit fee of Rs. 40,000/- (Rupees Forty Thousand only) plus applicable GST, considering it to be reasonable as suggested by the Official Liquidator. The Official Liquidator was also permitted to pay the audit fee, costs of the court application, and any other office expenses from the funds of the Estate and Establishment Fund Account. The application was ordered accordingly, with no costs awarded.

Key Issues

1. Whether an auditor should be appointed for the Estate and Establishment Fund Account and Company Paid Staff Terminal Benefit Fund Account for the financial year 2022-23, and if so, from which empanelled list or any other suitable Chartered Accountant. 2. What should be the reasonable audit fee, including GST, payable to the appointed auditor. 3. Whether the Official Liquidator should be permitted to pay the audit fee and other expenses from the Estate and Establishment Fund Account. The Official Liquidator argued for the appointment of an auditor for the specified period, citing the need for audit and referencing a previous appointment for the prior financial year. The Official Liquidator also proposed an audit fee of Rs. 40,000/- plus GST, considering it reasonable, and sought permission for payment from the company's funds. The judgment does not record any specific arguments from the revenue or state, as this is a company application concerning the winding up of a company.