Transfer of suit in liquidation proceedings refused where retaining the case avoided hardship and expense to the bank.

A suit connected with liquidation proceedings was held fit to remain at the original forum because the balance of convenience favoured retention there. The company was already in liquidation, the official liquidator had substantially admitted the bank's claim, and the real dispute lay mainly between the bank and the guarantors. Transferring the matter to Chandigarh would have required the bank to produce numerous witnesses from Faridabad and nearby areas, causing avoidable expense and hardship. The transfer request under section 446(3) of the Companies Act, 1956 was therefore rejected, and the suit was directed to continue at Faridabad.

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Issues: Whether the suit pending before the Senior Sub-Judge, Faridabad, should be transferred under section 446(3) of the Companies Act, 1956.

Analysis: The company was already in liquidation and the official liquidator had substantially admitted the bank's claim. The main dispute in the suit was essentially between the bank and the guarantors, while the official liquidator was not required to lead much evidence. On the other hand, transferring the suit to Chandigarh would oblige the bank to bring a large number of witnesses from Faridabad and nearby areas and would cause unnecessary expense. Considering the convenience of the parties, the suit was found fit to remain where it was pending.

Conclusion: The request for transfer was rejected and the suit was directed to continue at Faridabad.

Ratio Decidendi: A suit under liquidation proceedings will not be transferred when the balance of convenience lies in retaining it at the original forum and transfer would only impose avoidable hardship and expense on the opposite party.

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