2020 (11) TMI 518 - HC - Companies Law

Grant of Leave to proceed with the suit - HELD THAT - To have smooth and proper trial of the suit in question, it will be in the fitness of the things that the appellant / plaintiff is allowed to have the trial of the suit filed by the plaintiff against the defendants at the Delhi High Court itself upon its restoration by Delhi High Court as leave to proceed with the suit has been granted by the Company Judge now, as required under Section 446 of the Companies Act, 1956 since the appellant / plaintiff has undertaken to reimburse the cost of the Official Liquidator, Madras to contest the suit at Delhi in view of the shortage of the funds of the Company in liquidation M/s.Rayalaseema Commodities Limited and has agreed to make the initial deposit of ₹ 3,00,000/- subject to the account of the same being furnished by the said Official Liquidator before the Hon'ble Company Judge as well as to the appellant / plaintiff. We consider it appropriate to consider the said request of the appellant / plaintiff. The appellant / plaintiff is directed make a deposit of ₹ 3,00,000/- by way of a Demand Draft in favour of the Official Liquidator, Madras within a period of three weeks from today, after obtaining due acknowledgement thereof. The account of the expenses incurred for the same and further deposits, if any required, will be governed by the orders to be passed by the learned Company Judge - appeal disposed off.

Summary

Issues:
Transfer of suit from Delhi High Court to Madras High Court for trial.

Analysis:
The appellant filed an intra Court appeal against an order directing the transfer of a suit from Delhi High Court to Madras High Court for trial. The appellant, a plaintiff in the suit, argued that the transfer would inconvenience the parties involved as key individuals and entities were based in Delhi. The appellant expressed willingness to cover the costs of contesting the suit in Delhi due to the limited funds of the Company in liquidation. The Official Liquidator agreed to seek approval to present expense accounts for contesting the suit in Delhi. The appellant contended that the transfer request was not made by either party before the Company Judge. After hearing both sides, the Court decided that allowing the trial to proceed in Delhi would be more appropriate given the circumstances. The appellant was directed to deposit a sum of money to cover expenses, with further deposits subject to the Company Judge's orders. The Court modified the order, maintaining the first two directions but setting aside the transfer of the suit to Madras High Court. The Court referenced a previous order by Delhi High Court and noted that any waiver requests for deposit requirements should be made before the Delhi High Court upon suit restoration. The Official Liquidator was instructed to file the necessary applications accordingly. The Court concluded by disposing of the appeal, maintaining the direction to proceed with the suit in Delhi and setting aside the transfer to Madras High Court.