Fraudulent preference in pre-winding-up transfers leads to annulment where no genuine consideration or proper authorisation exists.

Transfers of company property made shortly before winding up may be avoided where the record shows no genuine consideration, no proper corporate authorisation, and a preference of selected creditors over the general body of creditors. The statutory protection for transfers made in the ordinary course of business or in good faith for valuable consideration does not apply on such facts. The deeming rules for commencement of winding up and avoidance of prejudicial transfers operate to protect creditors, and the impugned transfers were treated as fraudulent and annulled, enabling the Official Liquidator to take possession and deal with the properties according to law.

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Issues: Whether the transfers of the company's movable and immovable properties made shortly before the commencement of winding up were liable to be annulled as fraudulent preferences or void transfers under the Companies Act.

Analysis: The transfers were made within the relevant pre-winding-up period and the record showed absence of genuine consideration, absence of proper corporate authorization, and circumstances indicating preference to certain creditors to the exclusion of others. The statutory protection for transfers made in the ordinary course of business or in good faith for valuable consideration was held inapplicable on the facts. The deeming provisions governing commencement of winding up and avoidance of prejudicial transfers were applied to protect the general body of creditors.

Conclusion: The transfers were held to be fraudulent and not bona fide, and were annulled.

Final Conclusion: The application succeeded and the Official Liquidator was entitled to take possession and proceed with the properties in accordance with law.

Ratio Decidendi: A transfer made shortly before winding up, without genuine consideration or proper corporate authorization and with the effect of preferring selected creditors, is liable to be treated as a fraudulent preference and annulled.

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