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Question

When shall a corporate debtor be deemed to have given a preference as per the provisions of preferential transactions under the IBC?

A If there is a transfer of property or an interest thereof of the corporate debtor for the benefit of a creditor or a surety or a guarantor for or on account of an antecedent financial debt or operational debt or other liabilities owed by the corporate debtor Correct Answer Incorrect Answer
B If the transfer is made in the ordinary course of the business or financial affairs of the corporate debtor or the transferee Correct Answer Incorrect Answer
C If the transfer has the effect of putting a creditor or a surety or a guarantor in a beneficial position than it would have been in the event of a distribution of assets Correct Answer Incorrect Answer
D All a b & c Correct Answer Incorrect Answer
E Both a & c Correct Answer Incorrect Answer

Solution

Section 43-Preferential transactions and relevant time: (2) A corporate debtor shall be deemed to have given a preference, if— (a) there is a transfer of property or an interest thereof of the corporate debtor for the benefit of a creditor or a surety or a guarantor for or on account of an antecedent financial debt or operational debt or other liabilities owed by the corporate debtor; and (b) the transfer under clause (a) has the effect of putting such creditor or a surety or a guarantor in a beneficial position than it would have been in the event of a distribution of assets being made in accordance with section 53.

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