Secured creditor suits and company winding-up transfers under section 446 require real justice and convenience, not mere liquidator preference.

Section 446 of the Companies Act, 1956 is intended to protect the assets of a company in winding up and to secure efficient disposal of proceedings where appropriate, but a secured creditor remains entitled to realise its security. A mortgage suit by deposit of title deeds is not ordinarily a proceeding likely to require prolonged trial, and transfer should not be ordered unless justified by the interests of justice and convenience. On the facts, the suits for enforcement of the bank's mortgage security were not transferred from Hyderabad to the Company Court at Bombay, because the properties were in Hyderabad and the transfer would impose greater avoidable expense on the bank.

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Issues: Whether, in the facts of the case, the suits for enforcement of the appellant bank's mortgage security ought to be transferred from Hyderabad to the Company Court at Bombay under section 446 of the Companies Act, 1956.

Analysis: Section 446 is intended to protect the assets of a company in winding up from wasteful or expensive litigation and to enable expeditious disposal of matters by the company court where appropriate. A secured creditor is outside the winding up in the sense that it may realise its security, and a suit on a mortgage by deposit of title deeds is not ordinarily a proceeding likely to involve prolonged trial. The Court held that, on the facts before it, the transfer of the suits to Bombay was not justified, particularly as the properties were situated in Hyderabad and the transfer would impose greater avoidable expenditure on the appellant bank.

Conclusion: The order directing transfer of the suits to the Bombay High Court was set aside. The appellant succeeded on this issue.

Ratio Decidendi: In proceedings under section 446, transfer of a secured creditor's suit should not be ordered unless it is shown to be justified by the interests of justice and convenience; mere reference to the official liquidator's convenience or speculative expense does not suffice where the transfer would cause greater avoidable burden to the secured creditor.

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