XYZ Limited has during the financial year 2019-20, made private placement of 15,00,000 equity shares of ₹10 each at a issue price of ₹15 per share as below. The subscription amount was deposited in the current account of

First proviso to Section 42(6) of the Companies Act, 2013 prescribes that monies received on application under this section shall be kept in a separate bank account in a scheduled bank and shall not be utilised for any purpose other than- for adjustment against allotment of securities; or for the repayment of monies where the company is unable to allot securities. Hence, the company has not complied with the provisions of Section 42 (6) as the subscription amount was deposited in the current account of the company and was utilized before allotment.