Answer based on following passage.

Earn Limited, with an authorised capital of 10,00,000 is divided into equity shares of ₹ 10 each, issued 50,000 equity shares at a premium of 3 per share payable as follows.

On application - 3 per share
On allotment - 5 per share (including Premium)
On first and final call- Balance amount.

Applications were received for 60,000 shares. The Directors allotted the shares to all applicants on pro-rata basis. All money received except I call on 1,000 shares issued to Ravi.

Identify the subscription related to Earn Limited in above case.

Over Subscription

The correct answer is Option (1) → Over Subscription

Oversubscription refers to a situation in which the demand for a particular financial instrument exceeds the supply or the number of available shares. There are instances when applications for more shares of a company are received than the number offered to the public for subscription. This usually happens in respect of shares issue of well-managed and financially strong companies and is said to be a case of ‘Over Subscription’. In such a condition, three alternatives are available to the directors to deal with the situation: (1) they can accept some applications in full and totally reject the others; (2) they can make a pro-rata allotment to all; and (3) they can adopt a combination of the above two alternatives which happens to be the most common course adopted in practice.