(1) If a person has
borrowed debt from two or more creditors at a time or several times
by pledging any of his or her goods as a collateral and the goods so
pledged as the collateral are not sufficient to pay the debt of all the
creditors, except as otherwise provided for in the contract, all the
creditors who have taken the goods as collateral shall be deemed to
be in pari pasu in respect of the debt outstanding and shall have the
right to make a proportionate claim on the goods accordingly.
(2) A contract entered into giving priority right in the
future to a creditor on the goods already pledged as collateral
pursuant to sub-section (1) shall be void. If a creditor has already
recovered his or her debt from such a collateral before the contract
becomes void in spite of knowing that there are also other creditors
in respect of the security, such a creditor shall return the amount to
other creditors and recover his or her debt from other assets of the
pledger.