There is a lot of case law to indicatge that the subscriber to the Memorandum is liable to pay for & take the shares which he indicates against his name, under the subscripttion clause of the MoA.
However, there is no indication as to the waiting period. In a case where one of the subscibers has not paid for the number shares which he agreed to take (under the subscripttion clause) - can the Board treat those shares as free & issue such shares to another person.
Once the subscriber has signed, he is liable to the company, it is like debt owed to company. Section 36 (2) makes it very clear. So in any case he cannot repudiate his liability to subscribe for the shares as agreed upon.
I don think Board can treat it as free shares and issue to others.
Agreed with Sunny… the Board can not forfeit those shares and issue to any other person. As per section 36(2) it is a debt due from him to the company and he can not escape from his liability. If the debt is not discharged it continues till the winding up of the company and he is liable as contributory.
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