law: Companies Act, 1956
  Sec 71    -     Effect
  
  of irregular allotment 
  (1) An allotment made by a company to an applicant
  
  in contravention of the provisions of section 69 or 70 shall be voidable at the
  
  instance of the applicant
  (a) within two months after the holding of the
  
  statutory meeting of the company, and not later, or
  (b) in any case where the company is not required
  
  to hold a statutory meeting or where the allotment is made after the holding of
  
  the statutory meeting, within two months after the date of the allotment, and
  
  not later.
  (2) The allotment shall be voidable as
  
  aforesaid, notwithstanding that the company is in course of being wound up.
  (3) If any director of a company knowingly
  
  contravenes, or willfully authorizes or permits the contravention of, any of
  
  the provisions of section 69 or 70 with respect to allotment, he shall be
  
  liable to compensate the company and the allottee respectively for any loss,
  
  damages or costs which the company or the allottee may have sustained or
  
  incurred thereby :
  Provided  that proceedings to recover any such
  
  loss, damages or costs shall not be commenced after the expiration of two years
  
  from the date of the allotment.