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. Out of 70 persons to whom private placement is made 10 persons

Section 42(4) every identified person willing to subscribe to the private placement issue shall apply in the private placement and application issued to such person along with subscription money paid either by cheque or demand draft or other banking channel and not by cash. However, in the company XYZ Ltd. out of 70 persons to whom private placement is made 10 persons have paid the subscription amount in cash. Hence, the company has not complied with the provisions of Section 42(4) of the Companies Act, 2013.