Insufficient System Resources... When growing database physical file

We had a very severe issue in our production,

On Database:
3.2 TB Size of Partitioned Database with 60 File Groups
Every File Group contains One month data in its only one physical File.
Physical Files are of different size between 10GB and 300GB.

I was using this command to expand the physical file,

ALTER DATABASE [ODS] MODIFY FILE ( NAME = N'ODSFG33File1', SIZE = 307200000KB )

but was getting the following error,

MODIFY FILE encountered operating system error 1450(Insufficient system resources exist to complete the requested service.) while attempting to expand the physical file.

After trying a lot for this, the problem found that the physical file was highly fragmented, and offcourse the it was somehow exceeding the int variable capacity, which seems as created in the backend windows 2003 Server code,

So, Let's move to the solution,

Defrag the physical file using contig.exe
-------OR
Move the physical file to another network location, defrag the drive, and move file to its previous location