allotment of shares

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saritha (Querist)
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13 September 2009 within how many days shares are to be allotted to shareholders after receipt of application money by the company.
and as per which act.

pls reply ASAP

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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13 September 2009 Allotment must be made within a reasonable period of time. What is reasonable time must remain a question of fact in each case. On the expiry of reasonable time, section 6 of The Indian Contract Act, 1872 becomes applicable and the application must be deemed to have ben revoked.

Citation : - Karachi Oil Products Ltd Vs. Kumar Shree Narendrasinghji (1948) 18 Comp cases 215 (Bom).

In the above case the court held that allotment after an year from the date of application is ineffective.