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Section 39 – Allotment of Securities by company No allotment of any securities of a company offered to the public for subscription shall be made unless: · the amount stated in the prospectus as the minimum amount has been subscribed and · the sums payable on application for the amount so stated have been paid to and received by the company by cheque or other instrument. If the stated minimum amount has not been subscribed and the sum payable on application is not received within a period of thirty days from the date of issue of the prospectus, or such other period as may be specified by SEBI, then the application money shall be repaid within a period of fifteen days from the closure of the issue and if any such money is not so repaid within such period, the directors of the company who are officers in default shall jointly and severally be liable to repay that money with interest at the rate of 15% per annum. The application money to be refunded shall be credited only to the bank account from which the subscription was remitted.
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