What is Liabilities and rights of certain persons fraudulently preferred? What is effect of floating charge? Section 331 and 332 of Indian Companies Act 2013

Liabilities and rights of certain persons fraudulently preferred and Effect of floating charge are defined under Section 331  and 332 of Indian Companies Act 2013. Provisions under this Section is:

Section 331 of Indian Companies Act 2013 "Liabilities and rights of certain persons fraudulently preferred"

(1) Where a company is being wound up and anything made, taken or done after the commencement of this Act is invalid under section 328 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 a 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 interest of the person preferred under sub-section (1) shall be determined as at the date of the transaction constituting the fraudulent preference, as if the interest were free of all encumbrances other than those to which the mortgage or charge for the debt of the company was then subject.

(3) On an 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 Tribunal shall have jurisdiction to determine any questions with respect to the payment arising between the person to whom the payment was made and the surety or guarantor and to grant relief in respect thereof, notwithstanding that it is not necessary so to do for the purposes of the winding up, and for that purpose, may give leave to bring in the surety or guarantor as a third party as in the case of a suit for the recovery of the sum paid.

(4) The provisions of sub-section (3) shall apply mutatis mutandis in relation to transactions other than payment of money.

Section 332 of Indian Companies Act 2013 "Effect of floating charge"

Where a company is being wound up, a floating charge on the undertaking or property of the company created within the twelve months immediately preceding the commencement of the winding up, shall, unless it is proved that the company immediately after the creation of the charge was solvent, be invalid, except for the amount of any cash paid to the company at the time of, or subsequent to the creation of, and in consideration for, the charge, together with interest on that amount at the rate of five per cent. per annum or such other rate as may be notified by the Central Government in this behalf.

What is Arrangement when binding on company and creditors? What is Power to apply to Tribunal to have questions determined, etc? Section 321 and 322 of Indian Companies Act 2013

What is Costs of voluntary winding up? Is Debts of all descriptions to be admitted to proof?Section 323 and 324 of Indian Companies Act 2013

What is Application of insolvency rules in winding up of insolvent companies? What is Overriding preferential payments? Section 325 and 326 of Indian Companies Act 2013

What is Preferential payments? What is Fraudulent preference? Section 327 and 328 of Indian Companies Act 2013

What is Transfers not in good faith to be void? Certain transfers to be void. Section 329 and 330 of Indian Companies Act 2013

What is Liabilities and rights of certain persons fraudulently preferred? What is effect of floating charge? Section 331 and 332 of Indian Companies Act 2013

What is Disclaimer of onerous property? Is Transfers, etc., after commencement of winding up to be void? Section 333 and 334 of Indian Companies Act 2013

What is certain attachments, executions, etc., in winding up by Tribunal to be void? What are Offences by officers of companies in liquidation? Section 335 and 336 of Indian Companies Act 2013

What is Penalty for frauds by officers? What is Liability where proper accounts not kept? Section 337 and 338 of Indian Companies Act 2013

What is Liability for fraudulent conduct of business? What is Power of Tribunal to assess damages against delinquent directors, etc? Section 339 and 340 of Indian Companies Act 2013

 

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