1980 (3) TMI 226 - HC - Companies Law

Summary

Issues: Application under section 446(3) for transfer of suits from Delhi High Court to Calcutta High Court; Difficulty in disposing of suits; Balance of convenience; Exercise of power under section 446(3) of the Companies Act.

In this judgment, the official liquidator filed an application under section 446(3) of the Companies Act seeking the transfer of suits filed by the Union of India against the company in liquidation from the Delhi High Court to the Calcutta High Court. The suits, numbered 530 to 552 of 1967, were pending in the Delhi High Court before the winding-up order of the company was passed. The official liquidator faced challenges in managing the suits efficiently due to the company's insolvency and the costs involved in conducting the proceedings in Delhi. The court noted that despite efforts, the official liquidator encountered difficulties in the disposal of the suits at a minimum cost. The court considered the interest of justice and the better administration of the company in winding-up, emphasizing the need to exercise the power under section 446(3) for the benefit of the company, its creditors, and contributories.

Moreover, the court highlighted the significant delay in the pending suits, which had been ongoing for about 13 years, and the lack of diligent steps taken by the plaintiff in advancing the proceedings. The court emphasized that the balance of convenience favored transferring the suits to the Calcutta High Court, where the winding-up proceedings were taking place and where the official liquidator had access to relevant documents and records. The court underscored that the purpose of section 446(3) of the Companies Act was to expedite the disposal of winding-up matters and ensure the final dissolution of the company, and failing to transfer the suits would impede the administration of justice and frustrate the Act's provisions.

Consequently, the court, after careful consideration of the peculiar facts of the case, exercised its power under section 446(3) of the Companies Act and ordered the transfer of the suits from the Delhi High Court to the Calcutta High Court. The Union of India was directed to provide the cause title of the suits to the official liquidator, and the records of the suits were to be transmitted to the Calcutta High Court promptly. The suits were scheduled to be heard together with another suit for further direction. The court instructed the relevant authorities to act upon the order promptly to facilitate the transfer and consolidation of the suits for expeditious resolution.