M/S.Vara Vara Chits Limited (In Liqn) vs. No Respondent

Facts

The Official Liquidator, representing several companies in liquidation (including M/s. Tirumala Technologies Limited, M/s. World Wide Pharma Limited, and others), filed multiple Company Applications before the High Court of Telangana. These applications sought permission to take on record the half-yearly accounts for the period 01.10.2024 to 31.03.2025, along with the Independent Auditor's Report. The Official Liquidator also requested permission to pay an audit fee of Rs. 500/- plus GST to the auditor, M/s. Padmanabha Rao and Company, and to meet the application costs from company funds. A key prayer was for exemption from filing annual/final accounts for the financial year 2024-25, arguing that the two half-yearly accounts, when combined, would suffice.

Held

The Court partly allowed the Company Applications. Regarding the first three prayers, the Court directed that the half-yearly accounts for the period 01.10.2024 to 31.03.2025, along with the Independent Auditor's Report dated 03.04.2026, be taken on record. Permission was granted to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditor for each company and to meet the application costs from the available company funds or the Estate and Establishment Fund account, subject to reimbursement upon realization of assets. However, the Court declined to grant the prayer for exemption from filing annual/final accounts for the financial year 2024-25. The reasoning was that the Chartered Accountant would need to merge the accounts of both half-years, and only the annual accounts would provide correct information regarding the financial status of the companies in liquidation. The Court found that the annual accounts were essential for a complete financial picture.

Key Issues

1. Whether the Court should take on record the half-yearly accounts of the companies in liquidation for the period 01.10.2024 to 31.03.2025, along with the Independent Auditor's Report. 2. Whether permission should be granted to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the auditor for each company. 3. Whether the Official Liquidator should be permitted to meet the costs of the applications from the available funds of the companies in liquidation or the Estate and Establishment Fund account. 4. Whether an exemption should be granted for filing annual/final accounts for the financial year 2024-25, as required under Section 551 of the Companies Act, 1956, given the filing of half-yearly accounts. Contentions of the Petitioner (Official Liquidator): The Official Liquidator argued that regular filing of half-yearly accounts under Section 462 of the Companies Act, 1956, should suffice, and that annual accounts are merely a combination of the two half-yearly statements. Therefore, exemption from filing annual accounts was sought. Contentions of the Revenue/State: No specific contentions were recorded for the revenue or state in the provided judgment excerpt.