Section 531 - Fraudulent preference. - Companies Act, 1956

Effect of winding up on antecedent and other transactions Fraudulent preference. 531. (1) Any transfer of property, movable or immovable, delivery of goods, payment, execution or other act relating to property made, taken or done by or against a company within six months before the commencement of its winding up which, had it been made, taken or done by or against an individual within three months before the presentation of an insolvency petition on which he is adjudged insolvent, would be deemed in his insolvency a fraudulent preference, shall in the event of the company being wound-up, be deemed a fraudu lent preference of its creditors and be invalid accordingly: Provided that, in relation to things made, taken or done before the commencement of this Act, this sub-section shall have effect with the substitution, for the reference to six months, of a reference to three months. (2) For the purposes of sub-section (1), the presentation of a petition for winding up in the case of a winding up by [1] [the Tribunal], and the passing of a resolution for winding up in the case of a voluntary winding up, shall be deemed to correspond to the act of insolvency in the case of an individual. -------------------------------------- Notes:- [1] Substituted for "or subject to the supervision of the Court" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified.