Section - 533 - Companies Act, 1956

Section - 533 - Liabilities and rights of certain fraudulently preferred persons

Liabilities and rights of certain fraudulently preferred persons.

533. (1) Where, in the case of a company which is being wound up, anything made, taken or done after the commencement of this Act is invalid under

as a fraudulent preference of a person interested in property mortgaged or charged to secure the company’s debt, then (without prejudice to any rights or liabilities arising apart from this provision), the person preferred shall be subject to the same liabilities, and shall have the same rights, as if he had undertaken to be personally liable as surety for the debt, to the extent of the mortgage or charge on the property or the value of his interest, whichever is less.

(2) The value of the said person’s interest shall be determined as at the date of the transaction constituting the fraudulent preference, and shall be determined as if the interest were free of all encumbrances other than those to which the mortgage or charge for the company’s debt was then subject.

(3) On any application made to the

[Tribunal] with respect to any payment on the ground that the payment was a fraudulent preference of a surety or guarantor, the

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