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 COMPANY APPLICATION NO: I 630F 2023 ln 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 Telangana and The State of Andhra pradesh ...APPELLANT 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 9 of the Companies (Court) Rules, 1959 praying for an order to: i) take this affidavit and facts stated herein on record. ii.approve lhe allocation of 94 Companies (in liquidation) to 3 Chartered Accountants viz., 1). M/s.Murthy and Kanth, Chartered Accountant, Hyderabad 2). M/s. Padmanabha Rao and Co., Chartered Accountant, Hyderabad 3). M/s. K.B.S. Associates, Chartered Accountant, Hyderabad proportionately or pass such other order(s) as this Honorable Court may deem fit and proper for audit of Half yearly Accounts for the period from 01.10.2022 to 31.03.2023.

iii) permit the Official Liquidator to file the Audit Report on the Half yearly accounts for the period from 01.1O.2O22 to 31.03.2023 in respect of g4 Companies in liquidation before this Hon'ble Court within 60 days from the date of receipt of the same from the Chartered Accountants, so allotted. iv. permit the Official Liquidator to file an Affidavit of no Receipts or Payments in respect of 43 Companies in liquidation pursuant to Rule 300 of Companies Court Rules, 1959.

v. permit the Official Liquidator to pay the fees to the said Chartered Accountants in accordance with the order of this Honorable Court dated O8.O4.2022 made in C.A.No.8/2022 in RCC.No.2/1995.

^ ,it permit the payment of fee to Auditors out of the funds of the respective companies in Iiquidation 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 lhe same from the funds of such Companies upon' rdalization of those Companies assets.

vii. order that the cost of this apprication and misceflaneous cost do come out of the funds of the respective Companies in liquidation. . .. T_his Company Application coming on for orders upon readlng the Company Application and the affidavit dated 2}-or -2023 fired by Sri U.K.3anoo, onicii Liquidator in support of the Company Application and upon hearing the arguments of sri J. srinadh Reddy, rearned counser foi the officiar Liquidator for the App-ricant. The Court made the following: ORDER

THE HON'BLE SRI JUSTICE T. VINOD KUMAR COMPANY APPLICATION No.163 of2O23

ORDER

This application is filed under Section 457 & 462 of th..e Companies Act, 1956 (for short 'the Act') read with Rules 298, 300, 3O2, 304, 306 & 3O9 and further read with Rule 9 of the Companies (Court) Rules, 1959 seeking the relief as follows: take the alfidavit and facts stated herein on record; approve the allocation of 94 Companies in liquidation to the 3 Chartered Accountants viz., 1). M/s. Murthy & Kanth Chartered accountant, Hyderabad; 2). M/s. Padmanabha Rao & Co., Chartercd Accountant, Hyderabad proportionately or pass other order as this Court may deem fit and proper for audrt of Half Ycarly Accounts for the period from 01.1O.2022 to 31.10.2023; permit the Official Liquidator to file the Audit Report from OL|O.2O22 ro 3I.10.2023 in respect of 94 Companies in liquidation before thrs Court within 60 days from the date of receipt oI the same from the Chartered Accountants, so allotted; permit rhe Ofncial Liquidator to hle an Aflidavit of no Receipts or Payments in respect of 43 Companies in liquidation pursuant to Rule 3OO o[ Companies (Court) Rules 1959;

Permit the Otficial Liquidator to pay the fees to tlle said Chartered Accountants in accordance with the order of this Court dated OA.O4.2O22 made in C.A. No.8/2O22 in RCC No.2/ 1995;

permit the payment of fee to Auditors out o[ thc funds of the respective Companies rn liquidation and in case of Companies where sullicient funds are not available, il may be pcrmitted to pay from the funds of the Estate and Establishment Fund Account of the Oflicial Liquidator, subject to reimbursement of the same from the funds of such Companies upon realization of those Companies assets;

order that the cost of this application and miscellaneous cosl do come out of the funds of the respective Companies liquidation; and pass such other order..."

l.

vll vllr 2.

Heard Sri J. Sreenadh Reddy, learned Counsel for the Ofhcial Liquidator and the Official Liquidator and perused the record.

\ 3.

Learned Counsel for the applicant submits that in respect of the audit of 94 Companies in liquidation, three Chartered Accountants viz., Mls. 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 for the Official Liquidator further submits that this Court in similar circumstances in Company Application No.8 of 2022 in RCC. No.2 of 1995, had appointed the auditor for auditing the accounts of the Companies in liquidation in equar numbers. Learned counser for the official Liquidator has annexed a copy of the order passed by this Court in C.A. No.8 of 2022 in RCC No.2 of 1995.

5.

In view of the facts and circumstances and having regard to the similar order passed by this Court from time to time and also on consideration of the report of the Official Liquidator, I frnd that the audit work for the period of OI.7O.2O22 to 3L.1O.2O23 is required to be done by the auditors in respect of each of the Company similar to the work undertaken by them earlier whether or not there are transactions. In case there are rtl!:

.::, 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, this Court is of the view that the total number of Companies in respect of which the aforesaid work is required to be undertalen are to be distributed equally between the three auditors. 7.

The Olhcial Liquidator therefore is permitted to seek assistance of the aforesaid three auditors as listed in paragraph 3 of the affidavit by allotting them approximately the Audit work of 31 to 32 compared from the list of companies as shown in the annexure appended to the afhdavit and pay each auditor a fee quantified @ Rs.50O/- plus GST per company and submit the audited accounts for the approval of the Court. 8.

Further, the Official Liquidator is directed to ensure to the extent possible that the auditors to whom the aforesaid work of preparing audit is entrusted should not have audited the accounts cif the said Company in the previous financial year. 9.

The Company Application is, accordingly, ordered. SD/. B.S.CHIRANJEEVI JorNr HTRAR / //TRUE COPY// SECNOJ OFFICER To, TheofficialLiquidator,M/s.A.P.SteelsLtd&VariousCompanies(in f iqria"ii""l, Uign Court at Hyderabad for the state of Telangana Office at i'l-ttoo, corpoit" Bhawan' Nagole, Bandlaguda Thattiannaram Village ff"v"tf*ug- Mandal, Ranga ReJdy District Telangana State Pin Code . -c.-'*J500 680.

I

2. The Reqistrar of Companies, Ministry of Corporate Affairs, Government of lndia 2-nd floor Corporate Bhawan, Nagole, Bandlaguda, Thattiannaram Village Hayathnagar Mandal, Ranga Reddy District, Telangana State Pin Code 500 680.

3. The Regional Director, South Eastern Region, Ministry of Corporate Affairs, 3'd flooi Corporate Bhawan, Nagole, Bandlaguda' Thattiannaram Village Hayathnagar Mandal, Ranga Reddy District Telangana State, Pin Code 500 680.

4. The S.O. O.S. Section , High Court at Hyderabad, for the State of Telangana'

5. One CC to Sri J. Srinadh Reddy, Official Liquidator, High Court at Hyderabad'

6. Two CD Copies Rl.p A.J

t I HIGH COURT DATED:1611212023 tI j"a -'- -

ORDER

/ COMPA.No.163 of 2023 rn ':t tl Lj 'j'\ -, ' '' '

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co R.C.C. No.2 of f 995 DE s t,,^.i -", ./ .:,': -i:/ I '/r COMPANY APPLICATION IS ORDERED.

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