M/S. A.P. Steels Ltd. And Various Companies (In Liqn) v. No Respondent

[ 3166 ]

IN THE HIGH COURT FOR THE STATE OF TELANGANA

AT HYDERABAD SATURDAY, THE SIXTEENTH DAY OF DECEMBER TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE SRI JUSTICE T.VINOD KUMAR GOMPANY APPL IN COMP Y PETITION NO: 64OF 2023 IN R.C.C.No .2 of 1995 ln the matter of the Companies Act, 1956 And ln the matter of M/s. A.P. Steels Ltd. and Various Companies (in liqn) Between:

The official Liquidator, For the state of relangana and rhe state of Andhra pradesh ...APPLICANT Company Application Under Sections 457 and 462 of the Companies Act, 1956 r/w Rules 298, 300, 302, 304, 306, & 309 and further read with Rute g of the Companies (Court) Rules, 19S9 to i. take the affidavit and facts stated herein on record. ii. approve the arrocation of 131 companies (in riquidation) to 3 chartered Accountants viz., 1). M/s.Murthy and Kanth, chartered Accountant, Hyderabad 2). lril/s. Padmanabha Rao and Co., Chartered Accountant, Hyderabad 3). w/;. K.B.S. Associates, Chartered Accountant, Hyderabad propohionately or. pa.s such other order(s) as this Honorable court may deem fit and proper ror audit ot Half yearly Accounts for the period from 01.04.2022 to 3O.Og 2022.

iii) permit the officiar Liquidator to fire the Audit Report on the Harf yearry accounts for the period trom 01.o4.2022 to 30.09.2022 in respect oi t3i companies in liquidation before this Hon'ble court within 60 days from the date of receipt of the same from the Chartered Accounlants, so allotted. iv. permit the Official Liquidator to file an Affidavit If no Receipts or Payments ln respect of 15 Companies in liquidation pursuant to Rule 300 of Companies Court Rules, 1g59.

v. permit the Official Liquidator to pay the fees to the said Chartered Accounlants in accordance with the order of this Honorabre court dated 08 04.2022 made in C.A.No.8/2022 in RCC.No.2/1995.

vi. permit the payment of fee to Auditors out of the funds of the respective Companies in liquidation and in case of Companies where sufficient funds are not available, it may be permitted to pay from the funds of the Estate and Establishment Fund Account of the Official Liquidator, subject to reimbursement of the same from the funds of such Companies upon realization of those Companies assets.

vii. order that the cost of this application and miscellaneous cost do conie out of the funds of the respective Companies in liquidation. This Company Application coming on for orders upon reading the Company Applicatian and the affidavit dated 10-03-2023 filed by sri R.K. Sahu, official Liquidator in support of the Company Application and upon hearing the arguments of Sri J. Srinadh Reddy, learned counsel for the Official Liquidator for the Applicant. The Court made the following: ORDER

THE HON'BLE SRI JUSTICE T. VINOD KUMAR COMPANY APPLICATION No.64 of2o.23 OR.DER:

This application is filed under Section 457 & 462 of the Companies Act, 1956 (for shortthe ActJ read with Rules 298, 30O, 302, 3O4, 306 & 309 and further read with Rule 9 of the Companies (Court) Rules, 1959 seeking the relief as follows: -i take the aflidavit and facts stated herein on record; ii.

upp.or" the allocation of 131 Companies in liquidation to rhe 3 Chartered Accountants vD., l). M/s. Murthy gL Kanth Charrercd accountant, Hyderabad; 2)_ M/s. padmanabha Rao & Co., Chartered Accountant, Hyderabad proportionately or pass other order as this Court may deem frt and proper for audit of Half Yearly Accounts for the period fuom O1.O4.2O22 to 3O.O}.2O22: permir the Oflicial Liquidator to hle the Audit Reporr from OL.O4.2O22 to 3O.O9.2O22 in respect of l3l Companies in Irquidation before this Court within 60 days from the date ot reccrpt of rhe same from the Chartered Accountants, so allotred: iv permit the Offlcial Liquidator to file an Allidavit of no Receiprs or Payments in respect of 15 Companies in liquidation pursuanL ro Rule 300 of Companies (Court) Rules 1959;

v Pcrmit the Official Liquidator to pay the fees ro the sard Chartercd Accountants in accordance with the order of rhis Cour! dared 08.O4.2022 made in C.A. No.8/2022 in RCC No.2/ I995;

rr pcrmrr the payment of fee to Auditors out of the funds o[ the respectivc Companies in liquidation and in case of Companies \!herc sufficient lunds are not available, it may be permitted ro Pav from thc funds of the Estate and Establishment t.und Account ol the Official Liquidator, subject to reimbursemenr ol tlte same from the funds of such Companies upon realizalion ol rhose Companies assets;

vri order that the cost of this application and miscellancous cost do come out ot the tunds of th€ respective Companies liquidatron; and !'rr pass such orher order._."

2.

He:rrd Sri J. Sreenadh Reddy, Iearned Counsel lor the Official Liquidator and the Ofhcial Liquidator and perused the rccord.

3.

Learned Counsel for the applicant submits that in respect of the audit of 13 1 Companies in liquidation, three Chartered Accountants viz., M/s. Murthy & Kanth, Chartered Accountant, Hyderabad, 2). M/s. Padmanabha Rao & Co., Chartered Accountant, Hyderabad and 3). M/s K.B.S. Associates, Chartered Accountant, Hyderabad have expressed their willingness to act as auditors.

4.

Learned Counsel [or the Official Liquidator further submits that this Court in similar circumstances in Company Application No.8 ot 2022 in RCC. No.2 of 1995, had appointed the auditor for auditing thc accounts of the Companies in liquidation in equal numbers. Learned Counsel for the Offrcial Liquidator has annexed a copy of the order passed by this Court in C.A. No.8 of 2022 in IICC. No 2 of 1995.

5.

In vien, o[ thc facts and crrcumstances and having regard to the similar orders passed by this Court from time to time and also on considerzrtion of the rcport of the Ofircial Liquidator, I lrnd that the audit rvork lor thc period of O7.O4.2O22 to 3}.og.2022 is required to be done by the auditors in respect of each of the Companl' similar to thc work undertaken by them earlier u.hethcr or not Lhere are transactions. In case there are

no transactions in the accounts of particular company' the auditors work may be less compared to others' 6.

However, having regard to the fact that three auditors expressed their willingness to undertake the aforesaid work' [his Court is of the view that the total number of Companies in respect of which the aforesaid work is required to be undertaken are to be distributed equally between the three auditors' 7.

The Official Liquidator therefore is permitted to seek assistance of the aforesaid three auditors as listed in paragraph 3 ol thc athdavit by atlotting them approximately the Audit work of 43 to 44 compared from the list of companies as shown in the annexure appended to the affldavit and pay each auditor a fee quanrificd (r' Rs.500/- plus GST per company and submit the auditcd accounts for the approval of the Court' 8.

Furthcr, the Oflicial Liquidator is directed to ensure to the extent possible that lhe auditors to whom the aforesaid work of prcparing audir is sntrusted should not have audited the accounts of the saicl Company in the previous Iinancial year' SD/. B.S.CHIRANJEEVI JOINT REGISTRAR //TRUE COPY// SECTION OFFICER The Official Liquidator' M/s' A'P' Steels Ltd & Various Companies (in To, liouidation), High Court 't HyO"i'OuO for the state of Telangana Office at f i floor corporate gn'*'n]-N'JJe' Bandlaguda, Thattiannaram Village Hayathnagar tvlandal, Ranga ilJJV b's'ia Telangana State Pin Code ?fl3uf.t;,tua of companies, tvlinistry of corporate Affairs' Government or coipo"tt dna*an'Nagote' Bandlaguda' Thattiannaram village Hayathnagar rutuno'i"E ngu "Reooy oistiict' Telangana State "il:r'';Yl-'il.;

Pin Code 500 680.

3. The Regional Director. South Eastern Region, Ministry of Corporate Affairs, .3.rc ffgor Corporate Bhawan, Nagole, Bandlaguda, Thattiannaram Villaoe Havathnagar Mandar, Ransa nuoai oi"tii"t i-"L',i#, st"i., pii'E"a" "'"" 500 680.

4. The S.O. O.S. Section . High Court gt Hyderabad, for the State of Telangana. /

5. One cc ro Sri J. Srinadh nloav, oni"irir_il;,#il courr at Hyderabad.

6. Two CD Copies plp ns

HIGH COURT DATED:1611212023 T S Ar e € t{ q lt o tI g o zo -h ?mt

ORDER

.+ {* COMPA.No.64 of 2023 in R.C.C.NO.2 of 1995 o * P s AT ORDERING THE COMPANYA APPLICAT!ON G)',i*