Section 426. Undue preference in judicial management

(1) Any transfer, mortgage, delivery of goods, payment, execution or other act relating to property made or done by or against a company which is unable to pay its debts as the debts become due, from the company’s own money in favour of any creditor or any person in trust of any creditor with the intention to give such creditor a preference over other creditors shall be void in the event of the company being placed under judicial management on an application for a judicial management order presented within six months from the date of making, taking, paying or suffering the transfer, mortgage, delivery of goods, payment, execution and every such act.

(2) Any transfer or assignment by a company of all its property to trustees for the benefit of all its creditors shall be void.

(3) This section shall not affect the rights of any person making title in good faith and for valuable consideration through or under a creditor of the company placed under the judicial management.