Hada Steel Products Ltd. (In Liquidation) vs New Bank of India and Others

N.K. Sodhi, J.—This petition u/s 446(3) of the Companies Act, 1956 (for short, "the Act"), has been filed by the official liquidator with a prayer that Civil Suit No. 1494 of 1988 filed by the Now Bank of India (now Punjab National Bank and referred to hereinafter as "the bank") for the recovery of Rs. 2,68,43,089.23 from Hada Steel Products Ltd. (now in liquidation and hereinafter tailed "the company") pending in the Court of the Senior Sub-Judge, Faridabad, be transferred on the file of this court. Notice of this petition was issued to the respondents and the bank has contested the same.

By an order passed on May 14, 1987, in Company Petition No. 32 of 1987, the company was ordered to be wound up by this court and the official liquidator was appointed its liquidator. The bank which claims to be a secured creditor of the company to the tune of Rs. 2,23,26,000 filed Company Petition No. 127 of 1987, seeking permission of this court to file the suit for the recovery of the amount due to it from the company. The permission was granted and the suit was instituted in the Court of the Senior Sub-fudge, Faridabad. The defendants in the suit have been served, issues framed and the parties are now leading their evidence. It is at this stage of the suit that the official liquidator filed the present petition for the transfer of the suit. The only plea urged on behalf of the official liquidator is that for paucity of funds it may not be possible for him to contest the suit effectively at Faridabad and that every time when the case is fixed there he will have to go to Faridabad to instruct his counsel in the case. On the other hand, the bank while opposing the transfer of the suit has submitted that the same is based on a registered mortgage and that its claim has been admitted by the official liquidator. It is further contended on behalf of the bank that the dispute in the suit is primarily between the bank and the guarantors and that a large number of witnesses who belong to Faridabad and its neighbouring areas have to be produced to prove the documents and if the suit is transferred to Chandigarh the bank will unnecessarily have to incur a very heavy expenditure which is otherwise avoidable.

I have heard counsel for the parties at length. The official liquidator has already admitted the claim of the bank when he filed the Company Petition No. 115 of 1987 in this court for a direction to the secured creditors to give funds for appointing watch and ward staff. Even now it is not disputed on behalf of the official liquidator that the principal amount as claimed by the hank is due to it as per the statement of affairs filed by the ex-directors of the company though it is submitted by the bank that some more amount had become due to it by way of interest. Be that as it may, the official liquidator having virtually admitted the claim of the bank has not to lead much evidence in the trial court. The real dispute appears to be between the bank and the guarantors. If the plea of the official liquidator is accepted and the suit is transferred to this court the bank will have to produce all its witnesses here and for that a very heavy expenditure may have to be incurred with no useful purpose.

Keeping in view the facts and circumstances of the present case and the convenience of the parties I am of the opinion that the suit should continue at Faridabad. The petition is consequently dismissed leaving the parties to bear their own costs.