Q.Under Section 39(3) of the Companies Act, 2013, where an application for shares is not allotted, the application money must be refunded within:

The correct option is regret. A letter of regret is the communication a company sends to unsuccessful applicants — those to whom no shares have been allotted — usually accompanied by a refund order for their application money.

After a public issue closes, the Board and the secretary decide the basis of allotment. Because a popular issue is often over-subscribed, the company cannot give shares to every applicant. Applicants are therefore grouped as: those who get full allotment, those who get partial allotment, and those who get no shares at all.

Applicants who receive no shares must be told promptly and their money returned. The secretary sends them a letter of regret, expressing the company's inability to allot shares and enclosing the refund of the full application money (a refund order or the credit advice). This is distinct from a letter of allotment (sent to successful applicants) and a letter of renunciation (used in a rights issue when a member gives up his right to a third party).

The word/term is Regret Letter.

When a public issue is over-subscribed, a company cannot allot shares to every applicant. To those who are not allotted any shares, the secretary sends a letter of regret. This letter politely informs the applicant that, owing to heavy subscription, shares could not be allotted to him, and it is accompanied by a refund of the application money.

Since the statement describes exactly such a letter informing the applicant of non-allotment, the correct term is regret letter.