Sunder is a shareholder in Posh Industries Ltd. While subscribing for the shares in the company, the company has shown a continuous dividend of 65% for last five years in its prospectus. It is however revealed later on that during these last five years, the company has committed default once. Now Sunder wants the annulment of the allotment.

(a)Examine the rights of Sunder in present situation with reference to statutory provisions and case laws.

(b)What defences would you suggest in favour of the company in present case?