Skip to content

CS Executive · Capital Market and Securities Laws · Secondary Market in India

A stock exchange servant, knowing that a client is entitled to relief, deliberately freezes the client's account to favour a relative who is a rival broker. The client files a suit against the servant. Which statement best reflects Section 29 of the SCRA, 1956?

Protection is unavailable. Section 29 shields only things done or intended to be done in good faith in pursuance of the Act or its rules or bye-laws. A deliberate act to favour a relative lacks good faith, so employment with the exchange alone does not bar the suit.

  1. AProtection is unavailable because the act was not done in good faith in pursuance of the Act or its rules or bye-lawsCorrect
  2. BProtection is available because the servant is employed by a recognised stock exchange
  3. CProtection is available because Section 29 bars all suits against exchange servants irrespective of motive
  4. DProtection is available if the exchange later accepts responsibility for the act

Explanation

The shield in Section 29 is conditional on the act being done in good faith in pursuance of the Act, rules or bye-laws. A deliberate act to favour a relative is not good faith, so the servant cannot claim protection merely by being a servant. Later acceptance by the exchange is not a condition in the text.

Did you get it right without looking?

One question tells you little. A timed set on Secondary Market in India shows your real accuracy, how long you take and where you lose marks.

Practise Secondary Market in IndiaFree diagnostic mock

More Secondary Market in India questions