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Issues:
- Allegation of fraudulent transfers by a company to defraud creditors under sections 531 and 531A of the Companies Act. - Validity of transfers of movable and immovable properties made by the company before the winding-up application. - Examination of the provisions of sections 531 and 531A of the Companies Act. - Application of legal precedents regarding fraudulent preferences and avoidance of voluntary transfers. - Determination of whether the transfers were made in the ordinary course of business or in good faith for valuable consideration. - Assessment of whether the transfers were intended to give preference to certain creditors to the exclusion of others. - Decision on the annulment of the transfers and direction for the official liquidator to take possession of the properties. Detailed Analysis: The judgment pertains to a case where the creditors applied for the transfers made by a company to be declared as fraudulent under sections 531 and 531A of the Companies Act. The company's properties were alleged to have been transferred fraudulently to defraud the creditors before the winding-up application was filed. The court issued notices to individuals to whom the properties were transferred and appointed an official liquidator to identify the remaining assets of the company. The court examined the relevant provisions of sections 531 and 531A of the Companies Act, which deal with fraudulent preference and avoidance of voluntary transfers, respectively. The application under section 446 of the Companies Act detailed the transfers of movable and immovable properties to various respondents on specific dates in December 1990. The transfers were alleged to have been made without consideration and without following proper procedures, such as passing resolutions or obtaining authorizations. In the legal analysis, the court considered precedents such as Monark Enterprises v. Kishan Tulpule, Tansukhrai v. Official Liquidator, and Sunder Lal Jain v. Sandeep Paper Mills, among others. These cases highlighted the requirements for proving fraudulent transfers, lack of consideration, or inadequate consideration to establish fraudulent preferences or avoidance of transfers under the Companies Act. The court emphasized that the transfers should be made in the ordinary course of business or in good faith for valuable consideration to be valid. It was noted that the transfers in this case were intended to give preference to certain creditors to the exclusion of others, which was deemed fraudulent. The court found that the transfers were not genuine transactions and were executed to benefit specific creditors unfairly. Consequently, the court allowed the application, annulled the transfers of movable and immovable properties made to certain respondents in December 1990, and directed the official liquidator to take possession of the properties and handle them according to the law. The superintendent of police was instructed to provide necessary assistance for securing the properties. In conclusion, the judgment focused on the fraudulent transfers made by the company, the legal provisions governing such transfers, and the application of legal precedents to determine the validity of the transfers. The court's decision to annul the transfers and take possession of the properties aimed to protect the rights of all creditors and prevent unfair preferences to specific creditors.
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