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(2) This section shall not apply to a private company or to a company which has allotted any shares or delieutures before the date of the coming into operation of this Or-
dinance.
85. A company shall not previously to the statutory Restriction meeting vary the terms of a contract referred to in the on alteration prospectus or statement in lieu of prospectus, except subject of terms to the approval of the statutory meeting,
mentioned
in prospectus or statement
in lieu of
prospectus.
1b. s. 83.
Ib. s. 81.
86. (1) Where a prospectus invites persons to sub- Liability for serbo for shares in or debentures of a company, every statements person who is a director of the company at the time of the in pros- isstte of the prospectus, and overy person who has authori- pectus, sed the naming of him and is named in the prospectus as a director or as having agreed to become a director either immediately or after an interval of time, and every promoter of the company, and every person who has authorised the issue of the prospectus, shall be liable to pay compensation to all persons who subscribe for any shares or debentures on the faith of the prospectus for the loss or damage they may have sustained by reason of any untrue statement therolu, or in any report or memorandum appearing on the fare thereof, or by reference incorporated therein or issued therewith, unless it is proved –
(a) With respect to every untrute statement unt purporting to be made on the authority of an expert, or of a puldie official document or state- inent, that he had reasonable ground to believe, and did up to the time of the allotment of the shares or debentures, as the case may be, be- lieve, that the statement was true; and
(6) With respect to every nutrue statement puur- porting to be a stateussut by or courained in what purports to be a copy of or extraes from a report or valuation of an expert, that ir fairly represented the statement, or was a correct and fair copy of or extract from the report or valuation. Provided that the director, person named as director, promoter, or person who authorised the issue of the prospectus, shall be Hable to pay compensation as aforesail if it is proved that he had no reasonable ground to believe that the person making the statement, report, or valuation was comperent to make it:
and
(c) With respect to every untrue statement purport- ing to be a statement made by an official person or contained in what purports to be a copy of or extract from a public officiul docu- ment, that it was a correct and fair representa- tion of the statement or copy of or exÁCACT from the document :
or unless it is proved-
(i) that having consented to become a director of the company he withdrew his consent before the issue of the prospectus, and it was issued without his authority or consent ; Or
(i) that the prospertats was issued without his knowledge or consent, and that on becoming aware of its issue be forthwith gave reasonable public notice that it was issued without his knowledge or consent; or
(777) that after the issue of the prospectus and before allotment thereunder, he, on becoming aware of By untrue statement therein, withdrew his consent thereto, and gave reasonable public notice of the withdrawal, and of the reason therefor.
(2) Where a company existing before the date of the coming info operation of this Ordinance, has issued shares or debentures, and for the purpose of obtaining further capital by subscriptions for shares or debentures issues a prospectus, & director shall not be liable in respect of any statement therein, unless he has authorised the issue of the prospectus, or has adopted or ratified it,
Restriction as in allot-
ment.
$ Edw. 7 c.
હ છે. પા
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(3) Where the prospectus contains the name of a person as a director of the company, or as having agreed to be- come a director thereof, and he has not consented to become a director, or has withdrawn his consent before the issue of the prospecins, and has not authorised or consented to the issue thereof, the directors of the company, except any without whose knowledge or consent the prospectus was issued, and any other person who authorised the issue thereof, shall be liable to indemnify the person named as aforesaid against all damages, coste, and expenses to which he may be made liable by reason of his name having been inserted in the prospectus, or in defondling himself against any action or legal proceedings brought against him in respect thereof.
(4) Every person who by reason of his being a director, or banned as a director or as having agreed to become a director, or of his having authorised the issue of the pros- pectus, Leermes liable to make any payment under this Fection may recover contribution, as in cases of contract, from any other person who, if sued separately, would have been able to make the same payment, unless the person who has become so liable was, and that other person was not, guilty of fraudulent misrepresentation.
(5) For the purposes of this section--
The expression "promoter" means a promoter who was a party to the preparation of the pros- pectus, or of the portion thereof containing the untrue statement, but does not includo any person by reason of his acting in a professional capacity for persons engaged in procuring the formation of the company:
The expression "expert" includes engineer, valuer, gecountant, and any other person whose profes- sion gives authority to a statement made by him,
Allotment,
87.—(1) No allotment shall be male of any share capital of a company offered to the public for subscription, unless the following conditions have been complied with, namely:---
(a) the amount (if any) fixed by the memorandum. or articles of association and named in the prospectus as the minimum subscription apon
which the directors may proceed to alloiment;
or
() if no amont is so fixed and tamed, then the whole amount of the share capital so offerent for subscription,
har been subscribed, and the sum payable on application for the amount so fixed and named, or for the whole amount offered for subscription, has been paid to and received by the company.
(2) The amount so fixed and named and the wholo amount aforesaid shall be reckoned exclusively of any amount payable otherwise than in cash, and is in this Or- dinance referred to as the minimum subscription.
(8) The amount payable on application on each share shall not be less than five per cent, of the nominal amount of the share.
(4) If the conditions aforesaid have not been complied with on the expiration of forty days after the first issue of the prospectus, all money received from applicants for shares shall be forthwith repaid to the applicants without interest, and, if any such money is not so repaid within forty-eight days after the issue of the prospectus, the directors of the company shall be jointly and soverally liable to repay that money with interest at the rate of five per centom per annum from the expiration of the forty- eighth day:
Provided that a director shall not be liable if he provos that the loss of the money was not due to any misconduct or negligence ou his part.
(5) Any condition requiring or binding any applicant for shares to waive compliance with any requirement of this section shall be void.
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