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CS Executive · Capital Market and Securities Laws · Securities and Exchange Board of India

A law student reads that SEBI is described in the SEBI Act, 1992 as a body corporate with perpetual succession and a common seal. Which consequence follows directly from this description in Section 3?

SEBI can sue or be sued in its own name. Section 3(2) makes it a body corporate with perpetual succession and a common seal, with power to hold property and contract. It therefore continues despite changes in its members and needs no court permission to acquire property.

  1. ASEBI can sue or be sued in its own nameCorrect
  2. BSEBI ceases to exist when its Chairman's term ends
  3. CSEBI can acquire property only with prior court permission
  4. DSEBI can contract only through the Central Government

Explanation

Section 3(2) makes the Board a body corporate with perpetual succession and a common seal, with power to acquire, hold and dispose of property, to contract, and to sue or be sued by its own name. Perpetual succession means the Board continues despite changes in its members, so the option about the Chairman's term ending is wrong. The Act requires no court permission or Central Government route for contracts.

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