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Section 59
Voidable Transactions
: (1) If a company falls into bankruptcy, the following transactions shall be voidable :-
(a) priority transactions carried out six months before or within a period of six months after the commencement of the Damasahi proceedings,
(b) priority transactions with persons connected with the company immediately before the commencement of the proceedings relating to damasari or within a period of one year after the commencement of such proceedings. It should be understood that the transaction was carried out in such a way that the other creditor would have been paid more than what he would have received if he had made a claim on the company.
(c) immediately before the initiation of the Damasahi proceedings or within a period of one year after the commencement of the proceedings, if any transaction has been held at a low price and as a result of which the company has been placed in Damasahi or other transactions carried out at a low price after the commencement of the Damasahi proceedings, Explanation – For the purpose of this section "Low price transaction" means a transaction in which the company received a price lower than the prevailing market price or no price at all for the return given by the company to the other party to the transaction.
(d) Fraudulent transactions committed two years immediately before or within a period of two years after the initiation of the Damasahi proceedings. Explanation – For the purposes of this section, “fraudulent transactions” means defrauding the creditors of the company, delaying payment or adversely affecting the rights of the creditors. A misdemeanor is a transaction involving the company's assets.
(2) The liquidator shall submit an application to the court to cancel the transaction as per sub-section (1).
(3) When making an application according to sub-section (2), the liquidator must confirm that the company was in bankruptcy during such transactions or that the company was in bankruptcy due to such transactions.
(4) If it is found that the related person of the company is involved in the action related to canceling the transaction to be canceled, it will be assumed that the company was involved in fraud during such transaction or due to the same reason.
(a) priority transactions carried out six months before or within a period of six months after the commencement of the Damasahi proceedings,
(b) priority transactions with persons connected with the company immediately before the commencement of the proceedings relating to damasari or within a period of one year after the commencement of such proceedings. It should be understood that the transaction was carried out in such a way that the other creditor would have been paid more than what he would have received if he had made a claim on the company.
(c) immediately before the initiation of the Damasahi proceedings or within a period of one year after the commencement of the proceedings, if any transaction has been held at a low price and as a result of which the company has been placed in Damasahi or other transactions carried out at a low price after the commencement of the Damasahi proceedings, Explanation – For the purpose of this section "Low price transaction" means a transaction in which the company received a price lower than the prevailing market price or no price at all for the return given by the company to the other party to the transaction.
(d) Fraudulent transactions committed two years immediately before or within a period of two years after the initiation of the Damasahi proceedings. Explanation – For the purposes of this section, “fraudulent transactions” means defrauding the creditors of the company, delaying payment or adversely affecting the rights of the creditors. A misdemeanor is a transaction involving the company's assets.
(2) The liquidator shall submit an application to the court to cancel the transaction as per sub-section (1).
(3) When making an application according to sub-section (2), the liquidator must confirm that the company was in bankruptcy during such transactions or that the company was in bankruptcy due to such transactions.
(4) If it is found that the related person of the company is involved in the action related to canceling the transaction to be canceled, it will be assumed that the company was involved in fraud during such transaction or due to the same reason.