Going by your narration, I share the difficulties your colleagues facing due to his transfer. I also understand the needless travel to a far of place. I have not come across any one successfully challenged a 'transfer' under existing laws especially those who are attached to a project. Moreover he only is in a position to continue in employment come what may rather than threaten the co using an option to quit. No employee could ensure a posting in a place of his/her choice under the 'contract of service/employment' whatsoever his/her compulsions could be. Of course and unless the contract/agreement/terms & conditions of employment stipulates such a conditional posting.
I can only suggest, in the circumstances explained, meet & seek the support of HR in a manner fitting to the issue, as a special case to retain his position so that it will be conducive to meet his compulsions on the plea of compassion.
As a well-informed member of a Forum for employees' rights and welfare, you know we'll that transfer is an incidence of service. As such you will agree with the fact that based on the exigencies of work it is the preogative of the employer to decide who among his employees to work where and how long. Therefore, any individual employee's hardships or personal problems due to transfer recede to the background and cannot be agitated otherwise the transfer is against the service regulations or the terms of the contract of service or colorable exercise of power or a measure of victimization.
Coming to the IT and ITES sector, you know well that it is always market-driven and because of which factor such Companies indulge in Mass transfers or experience sudden mass redundency of employees that results in serving of pink-slips. Fortunately, the high degree of employability of such affected white collar workforce provides sufficient resilience and such things go often uncomplained and eventually unnoticed. Same is the situation in the matter of transfer too.
Regarding your first question, it cannot be precisely set down as transfer is contingent upon the work of the organization. You also remember the fact transfer involves additional labor cost to the organization. I don't think any employer will have a transfer policy just to shuffle the employees.
Work from home is already in Vogue in the IT industry across the world. In my opinion, it is a stop-gap arrangement in case of emergency and unavoidable circumstances. I think one cannot demand it as a routine practice. Then there is no necessity for sprawling offices and administrative paraphernalia.
In exceptional cases the affected employee can make an appeal but cannot question it legally. Better you compare the the plight of government servants, bank employees who have got a transfer cycle of three years.