
With a view to issue shares to the general public a prospectus containing some false information wa…
With a view to issue shares to the general public a prospectus containing some false information was issued by a company. Rahul received copy of the prospectus from the company, but did not apply for allotment of any shares. The allotment of shares to the general public was completed by the company within the stipulated period. A few months later, Rahul bought 2000 shares through the stock exchange at a higher price which later on fell sharply. He sold these shares at a heavy loss. Now he claims damages from the company for the loss suffered on the ground the prospectus issued by the company contained a false statement. Is his claim justified?