TaxTMI 
TaxTMI 
1942 (6) TMI 7
X X X X Extracts X X X X
X X X X Extracts X X X X
.... prospectus issued on 20th January, 1937, containing, inter alia, the names of several persons as directors and specifying the sum of Rs. 40,000 as the minimum sum upon which the company would proceed to allotment of the shares. Before the allotment took place, there were changes in the directorate, on which the plaintiff appellant relied as one ground on which he could withdraw his offer and decline allotment; the minimum subscription required before allotment was reduced from Rs. 40,000 to Rs. 10,000 and it was this proceeding which put the appellant upon enquiry. This important change was made on 9th May, 1937, and two days later an allotment letter was sent to the plaintiff appellant. On 26th May he wrote to the company drawing their at....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ectors could have contemplated commencing business with such a ridiculously low figure as Rs. 10,000. They proposed to erect a modern factory in which to manufacture motor tubes, cycle tyres and tubes and other rubber goods required for vacuum brakes, etc., mills, printing presses, electrical departments, rubber sheetings, toys, battery cases, rubber shoes, clothing and various other articles. The annual working expenses are shown as nearly Rs. 80,000 while the capital expenditure required was over one and a half lakhs and it requires very little knowledge of the cost of modern plant and mahinery to realise that Rs. 10,000 was an absurd figure on which to proceed to the allotment of shares in such a company with such an ambitious programme.....