331. 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.