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In Pramatha Nath Sanyal Vs Kali Kumar Dutt, an advertisement was inserted in a newspaper stating, “Some shares are still available for sale according to the terms of the prospectus of the company which can be obtained on application”. This was
held to be a prospectus as it invited the public to purchase the shares.
The prosecution was accordingly launched on the Directors for non-compliance. “Public” is a general word, and includes any section of the public. This means that if a document inviting persons to buy shares is issued for example to all advocates or to all doctors, or to all foreigners living in India or to all Indian citizens or to all shareholders in a particular company, it will still be deemed to be issued to the public.
The offending matter in this case is an advertisement offering to the public some shares of the Company for sale. It, therefore, clearly comes within the definition of “prospectus” as contained in Section 2, Clause (14) of the Act.
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