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15. Debts incurred for the purposes of notified sugar undertakings to have priority.-

Every debt arising out of any loan advanced to a notified sugar undertaking by the Central Government or a State Government for carrying on the management of such undertaking-

(a) shall have priority over all other debts, whether secured or unsecured, incurred before the management of such undertaking was taken over under this Act;

(b) shall be a preferential debt within the meaning of section 530 of the Companies Act, 1956 (1 of 1956),

and such debts shall rank equally among themselves and be paid in full out of the assets of the undertaking unless such assets are insufficient to meet them, in which case they shall abate in equal proportions.

Sugar Undertakings (Taking Over of Management) Act, 1978 Back

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